Natural gas prices dip on firmer dollar, disappointing storage draw

Natural gas prices gave up ground after a smaller-than-expected storage draw last week, while also being pressured by a stronger dollar. The dip comes about after earlier U.S. data showing a jump in unemployment claims to a six-month high, while the Philly Fed Manufacturing Index fell less than expected in January. 

As of 05:13 GMT, natural gas futures due on February 16 fell 0.47% to $2.108 per million British thermal units, away from the opening price of $2.135, with an intraday low at $2.100, and a high at $2.189. Earlier, the Energy Information Administration released its report on natural gas storage for the week ending January 15, showing a draw of 178 billion cubic feet, less than the 180B draw expected, but higher than the previous reading's 168 billion. 

The report showed a total of U.S. natural gas inventories at 3.297 trillion cubic feet, down from the previous week's 3.475 trillion. The current total is however higher than a year ago at 2.668 trillion, and also higher than the five-year average at 2.824 trillion. 

The U.S. dollar index, which measures the greenback's performance versus a basket of counterparts, gained ground to trade at 99.45, up from the opening level of 99.21, with an intraday high at 99.80, and a low at 98.91.

 Earlier data showed a surge of U.S. initial unemployment claims for the week ending January 16 to a six-month high at 293 thousand, worse than analysts' expectations of 278K, and compared to the previous reading's 283K. Continuing claims on other hand fell to 2.208M from the previous reading's 2.264M, beating analysts' expectations of 2.253M. On a similar note, the Philly Fed Manufacturing Index, which tracks Philadelphia's manufacturing sector, dropped 3.5% in January, the fifth such monthly decline, but better than analysts' expectations of a 5.0% drop. December's reading however was revised lower to show a deeper fall of 10.2% and not 5.9% as thought before.