Natural gas hits one-year nadir on less-than-expected US inventory drawdown

Natural gas futures fell to February 22, 2017 lows even as the dollar index hit the lowest since early February, following earlier data from the US, the world's largest energy consumer, including the EIA report that showed a lower-than-expected inventory drawdown. 

As of 08:29 GMT, natural gas futures due on March 15 shed 0.12% to $2.584 per million British thermal units from the opening of $2.587, while the dollar index declined 0.62% to 88.57 from the opening of 89.12. 

Earlier US data showed producer prices rose 0.4% in line with expectations in January, compared to a 0.1% dip in December, while core prices rose 0.4%, compared to a 0.1% slip, and beating expectations of a 0.2% increase. 

Unemployment claims rose 7 thousand to 230 thousand from 223 thousand in the previous reading, above expectations of 229K, while the Philly manufacturing index rose to 25.8 from 22.2 in January, beating forecasts of 21.5. 

The Empire State Manufacturing Index fell to 13.1 in February from 17.7 in January, while industrial production fell 0.1% in January, compared to a 0.4% rise in December, revised from a 0.9% increase, while analysts expected a 0.2% rise. 

The Capacity Utilization Rate fell to 77.5% from 77.7% in December, revised from 77.9%, and missing expectations of 78.0%. 

The Energy Information Administration released its report on US natural gas stocks, showing a deficit of 193 billion cubic feet in the week ending February 9, up from 119 billion in the previous reading, while analysts expected a 194B deficit. 

Total inventories have now fallen to 1.884 trillion cubic feet from 2.078 trillion in the week ending February 2, which is below the total of the same period in 2017 at 2.461 trillion, while also below the five-year average at 2.317 trillion.