Natural gas prices slip as dollar strengthens

Natural gas prices took a step back as the U.S. dollar index muscles its way up according to the inverse relation between the two, which comes after a spate of U.S. data showing an unexpected jump in both manufacturing PMI and existing home sales, while on the other hand the CB Leading Index dropped more than expected in December. 

As of 05:58 GMT, Natural gas futures due on February 16 inched down 0.05% to $2.137 per million British thermal units, compared to the opening price of $2.149, with an intraday low at $2.112, and a high at $2.168. 

Yesterday, 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 99.37, up from the opening level of 99.24, with an intraday high at 99.46, and a low at 99.11.

Earlier U.S. data showed that Flash Manufacturing PMI for January rose to 52.7, comfortably higher than forecasts of 51.1, and compared to December's 51.2. Additionally, the CB Leading Index dropped 0.2% m/m in December, worse than expectations of a 0.1% drop, and compared to November's 0.5% rise. Finally, Existing Home Sales jumped 14.7% in December to 5.46 million units (annualized), beating analysts' expectations of a 9.2% rise to 5.34 million, and much better than November's 10.5% drop to 4.76 million.