The NYMEX May natural gas futures expired Thursday at $2.036/MMBtu, down 3.2 cents from Wednesday's close, after initial support on the back of weekly US Energy Information Administration storage data failed to overcome persistently bearish fundamentals.
The expiration came at the end of a wild trading day that saw the contract reach $2.187/MMBtu, up 11.9 cents compared with Wednesday's close, after the release of an initially supportive storage report before falling below $2/MMBtu shortly ahead of expiration.
"We had a bit of a meltdown there at the end," said Kyle Cooper, an analyst with IAF Advisors. "I think we were a little bit oversold and a lot of people were caught short."
The contract traded between $1.999/MMBtu and $2.187/MMBtu Thursday.
The storage report included initially supportive news of a revision to the previous week's report, showing 11 Bcf less than previously reported had been injected into stocks, but prices quickly retreated due to the record amount of gas still in storage and unsupportive weather forecasts, according to Pax Saunders, an analyst with Gelber & Associates.
Saunders said that storage injections have been about 3 to 4 Bcf/day below normal, but that has done little to quell fears that storage could reach capacity by early fall.
"The closing of the storage gap is critical to price recovery," he said.
The May contract, which opened its first day as the prompt-month contract on March 28 at $2.282/MMBtu, saw prices fall to their lowest levels since September 2001 when it settled at $1.907/MMBtu on April 19.
The June contract settled at $2.126/MMBtu, down 4.4 cents from Wednesday's settlement.
