US natural gas prices plummeted 6% on stockpile build-up and lower demand

On Thursday, natural gas prices in the US collapsed by about 6% to a two-week low of $3.921 per million British thermal units due to an unforeseen increase in storage inventories. Additional pressure on prices came from forecasts of seasonally normal temperatures and corresponding expectations of weaker fuel demand next week.

According to the US Energy Information Administration (EIA), last week, the country's utilities added 9 billion cubic feet of natural gas to the reserves. Analysts polled by Reuters expected an increase of only 3 billion cubic feet.

Still, the amount of gas in US storage remains about 10% lower than usual for this time of year, following extensive withdrawals of the fuel during freezing weather in January and February.

Energy market participants quoted by Reuters believe the projected decline in gas demand ought to allow utilities to continue replenishing storages in the coming weeks.