The NYMEX April natural gas futures contract, after spending much of Thursday morning in negative territory, rebounded slightly to settle at $1.806/MMBtu, up 1.2 cents, after a weekly storage report that showed a smaller-than-expected injection provided some support.
On the week, the prompt-month contract is in decline, giving up a combined 10.1 cents, more than erasing all of last week's 8.5-cent gain.
The US Energy Information Administration on Thursday morning reported working gas in storage increased by 15 Bcf to 2.493 Tcf for the week ended March 18.
The injection was slightly below the consensus expectations of analysts, who were expecting a storage build of 18-22 Bcf.
"The inventory number came in a little smaller than the average guess was, which was a little supportive, even though an injection of any type right now is bearish," Price Futures Group senior market analyst Phil Flynn said.
Thursday's reported storage build was in sharp contrast to the 4-Bcf withdrawal reported for the same week last year as well as the 24-Bcf five-year average storage pull.
"The other thing giving support to prices is the weather lately. When we thought it was spring, we started getting a bit of cold weather. Basically, our feeling is that weather is going to drive us here a little. We're also keeping an eye on production. It's a slow process to see production come down and it's not happening as quickly as you might think," Flynn said.
The recent wave of winter weather may be short-lived, as the weather service's six- to 10-day outlook called for above-average temperatures to extend from Texas, along the Gulf Coast and into the Northeast.
Unseasonable warmth was also forecast along portions of the West Coast and Pacific Northwest. Expectations for below-average temperatures were limited to portions of the inland West.
Total US demand over the next seven days is expected to average 71.9 Bcf/d, a nearly 3.6-Bcf decline from the prior seven-day average, data from Platts unit Bentek Energy showed.
According to Baker Hughes in its weekly report, the number of gas rigs in the US increased by three to 92, down from 233 working rigs a year ago.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
