January Nymex natural gas closed down by -2.88% on Thursday due to a smaller-than-expected draw in the weekly EIA natural gas storage report. The EIA reported a draw of -167 bcf, less than the expected -176 bcf, causing prices to fall. Warmer US weather and higher production levels are contributing to the decline in natural gas prices.

US lower-48 dry gas production was 112.9 bcf/day, up 8.8% y/y, while state gas demand was 90.9 bcf/day, down 4.4% y/y. Estimated LNG net flows to US export terminals were 17.5 bcf/day. Higher US production levels and lower demand are putting pressure on natural gas prices.

The weekly EIA report showed a bearish trend in natural gas prices, with inventories falling by -167 bcf, slightly below market consensus. Inventories were down -1.2% y/y and slightly above the 5-year average. European gas storage is 69% full, below the 5-year average of 78%.

Baker Hughes reported a decrease in active US natural gas drilling rigs, falling by -2 to 127 rigs. The number of rigs has increased over the past year but remains below the recent high of 130 rigs. The market continues to face challenges due to high production levels and lower demand for natural gas.

Read more at Yahoo Finance: Nat-Gas Prices Drop on a Smaller-Than-Forecast Draw in Weekly Storage