Natural gas drops 1% as US inventory drawdown shrinks

Natural gas futures fell nearly two percent in American trade as the dollar index gained ground, following earlier data from the US, the world's largest energy consumer, including the EIA report that showed another inventory drawdown for the sixteenth week in a row. 

As of 07:55 GMT, natural gas futures due on May 15 fell 1.58% to $2.675 per million British thermal units from the opening of $2.718, while the dollar index rose 0.37% to 90.48 from the opening of 90.14, marking early March highs. 

Earlier US data showed unemployment claims in the week ending March 31 rose 24 thousand to 242 thousand from 218K, compared to expectations of 225K, while continuing claims in the week ending March 24 fell 64 thousand to 1.808 million from 1.872, beating expectations of 1.843 million. 

The trade deficit widened to $57.6 billion from $56.7 in January, missing expectations of $56.9 billion, while Federal Reserve Bank of Atlanta President Raphael Bostic spoke earlier today about financial literacy at the University of South Florida, in Sarasota.

The Energy Information Administration released its report on US natural gas inventories, showing a drawdown of 29 billion cubic feet in the week ending March 30, compared to a 63B drop in the previous reading, and matching analysts' expectations. 

Total inventories have now fallen to 1.354 trillion cubic feet from 1.383 trillion in the week ending March 23, which is below the total of the same period in 2017 at 2.051 trillion, and also below the five-year average at 1.701 trillion.