Natural gas skids 4% on lower-than-expected US inventory drawdown

Natural gas futures fell over four percent in American trade to the lowest since January 9, as the dollar index plumbed January 25 lows, following a basket of data from the US, the world's largest energy consumer, including the EIA report that showed a lower-than-expected inventory drawdown last week. 

As of 08:39 GMT, natural gas futures due on March 15 fell 4.11% to $2.872 per million British thermal units from the opening of $2.995, while the dollar index shed 0.59% to 88.61 from the opening of 89.13. 

Earlier US data showed unit labor costs rose 2% in the fourth quarter, above expectations of a 0.9% rise, and compared to the third quarter's 0.2% dip, while non-farm productivity dipped 0.1%, compared to a 2.7% rise in the third quarter, while analysts expected a 0.7% rise. 

US unemployment claims fell to 230 thousand in the week ending January 27 from the previous reading's 231K, revised from 233K, while analysts expected 237K. 

The Energy Information Administration released its report on US natural gas inventories, showing a drawdown of 99 billion cubic feet in the week ending January 26, adding to the 288B drawdown in the previous reading, while analysts expected a 102B drop. 

Now total stocks fell to 2.197 trillion cubic feet from 2.296 trillion in the week ending January 19, which is below the total of the same period in 2016 at 2.723 trillion, while also below the five-year average at 2.622 trillion. 

The Federal Reserve voted on Wednesday to hold overnight interest unchanged at the range of 1.25% to 1.50% at the January 30-31 meeting, matching analysts' expectations.