Natural gas sinks 5% after disappointing US inventory drawdown

Natural gas futures fell nearly five percent even as the dollar index gave up ground, following earlier data from the US, the world's largest energy consumer, including the EIA report that showed a less-than-expected natural gas inventory drawdown. 

As of 09:34 GMT, natural gas futures due on January 15 slumped 4.59% to $3.033 per million British thermal units from the opening of $3.179, with an intraday low at $3.008, and a high at $3.194, while the dollar index shed 0.14% to 93.04 from the opening of 93.16.

Earlier US data showe personal spending rose 0.3% in October, slowing down sharply from 0.9% in September, revised from 1.0%, while analysts expected a 0.2% rise. 

US personal income rose 0.4% in October, same as September while beating analysts' expectations of a 0.3% rise. 

Similarly, the Core PCE Price Index slowed down to 0.1% in line with expectations from 0.4% in September, while core personal spending steadied at 0.2% m/m, and 1.4% y/y as expected. 

US unemployment claims fell to 238 thousand in the week ending November 25, compared to expectations of 241K, and down from the previous reading of 240K, revised upwards from 239K, while continuing claims rose by 42 thousand to 1.957 million from 1.915 million, compared to expectations of 1.890M. 

Chicago PMI fell to 63.9 in November from 66.2 in October, missing expectations of 62.2, while Federal Reserve Governor Randal Quarles is due to speak about payment systems at the Financial Stability and Fintech Conference, in Washington DC, as Federal Reserve Bank of Dallas President Robert Kaplan is also due to participate in a panel discussion at the Real Estate Council, in Dallas.

Otherwise,  the Energy Information Administration released its report on US natural gas storage, showing a drawdown of 33 billion cubic feet in the week ending November 24, compared to a 46B drop in the previous reading, while analysts expected a 37M drawdown. 

Total stocks have now fallen to 3.693 trillion cubic feet from 3.726 trillion in the week ending November 17, which is below the total of the same period in 2016 at 4.002 trillion, and also below the five year average at 3.800 trillion.