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Growing Glut Could Push Natural Gas Below $2 As Winter Fades

By Sumit Roy

Natural gas was last trading down by more than 2 percent to $2.60/mmbtu after the Energy Information Administration reported that operators withdrew 115 billion cubic feet from storage last week, at the low end of the 112 to 122 bcf range of analyst estimates.

The latest withdrawal was below last year's withdrawal of 262 bcf and below the five-year average withdrawal of 152 bcf.

In turn, inventories now stand at 2,428 bcf, which is 505 bcf above the year-ago level and 23 bcf below the five-year average (calculated using a slightly different methodology than the EIA).

The weather last week was much milder than seasonal norms.

According to the Edison Electric Institute, utilities generated 77,867 GWh in the week ending Jan. 31, down 9.1 percent from a year ago.

Looking forward, the NOAA's six- to 10-day outlook calls for colder-than-normal temperatures across the Eastern half of the… Read More …