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Natural gas tumbled on Thursday after the Energy Information Administration reported that US natural gas stockpiles declined less than expected last week, adding to pressure already being exerted by forecasts for warm weather across most of the US next week.

Natural gas for delivery in March slid 1.80% to $2.614 per million British thermal units by 15:42 GMT, having earlier declined to 2.578, the lowest since August 2012. The contract fell 3.34% yesterday to $2.662 and is down 2.8% for the week so far.

The EIA reported that US natural gas inventories fell by 115 billion cubic feet in the seven days through January 30th, below analysts projections for a withdrawal in the range of 117-123 bcf. This compared to the five-year average of 165 bcf, while inventories declined by 259 bcf during the comparable period a year earlier.

Total gas held in US storage hubs amounted to 2.428 trillion cubic feet, narrowing the deficit to the five-year average stockpiles of 2.457 trillion to 1.2%, or 29 bcf, from 3.0% a week earlier. The surplus to the year-ago storage of 1.960 trillion cubic feet expanded to 23.9% from 14.6% during the preceding period.

This week’s drop, to be reflected in February 12th’s report, is likely to be much closer to the average as the recent and upcoming cold blasts over the North and East are factored in. However, this weekend and next week’s warm-up over the central, southern and western US is likely to lead to a much thinner withdrawal for the following report due at February 19th. Supplies through the third week of February basically stand a real chance of turning deficits to the five-year average into surpluses.

According to NatGasWeather.com, natural gas demand in the US through February 11th will be high compared to normal, but easing to moderate, with a warm weather trend for the west and central US, while the Northeast remains cool.

A cold blast which hit the northern US yesterday has pushed overnight lows into the single digits and below 0 degrees, driving very strong heating demand. Cooler temperatures have also infiltrated the Southeast but a rapid warm-up over the central and southern US on Friday into Saturday will be quick to push readings above the normal. Apart from the coastal states which will see high snow accumulations, the West will enjoy dry and warmer-than-usual weather throughout the week.

The central and southern US will be engulfed by higher readings this weekend and early next week as highs reach into the mid and high 70s, while a new weather system tracks across the Northeast and Great Lakes, bringing cool temperatures.

Next week, the country’s western and central regions will continue to experience near or warmer-than-usual temperatures, NatGasWeather.com reported, including over Texas. The Midwest and eastern US will see weather systems track over, bringing rain, snow and slightly cooler-than-normal temperatures, but the most threatening frigid Canadian air is not expected to push deeper south than the Great Lakes and Northeast.

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