On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD2.971 per million British thermal units during U.S. morning trade, falling 6.29%.
The Energy Information Administration said that natural gas in storage grew by 28 billion cubic feet to 3.217 trillion cubic feet for the week ended July 27.
Analysts had forecast an increase of 23 billion to 3.167 trillion cubic feet.
Total natural gas inventories are now 14.5% above the five-year average of 2.810 trillion cubic feet for this week and 17.2% above last year’s level of 2.745 trillion cubic feet, according to the government data.
The increase last week compares with an addition of 43 billion cubic feet a year ago and a five-year average build of 56 billion cubic feet.
Stockpiles rose to 60% above the five-year average earlier this year after a mild winter cut demand for natural gas to heat homes and businesses, sparking fears that supplies would exceed available storage capacity by the end of the year.
Prices had climbed to the highest levels of the year earlier in the week, as forecasts for higher-than-average temperatures across much of the U.S. boosted the outlook for increased gas-powered electricity consumption.
Warmer-than-normal temperatures increase the need for gas-fired electricity to power air conditioning, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September was down 1.38% to USD87.77 a barrel, while heating oil for September delivery slipped 0.13% to USD2.856 per gallon
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