Natural gas futures plummeted today after the Energy Information Administration (EIA) released its weekly storage report, revealing a substantial build in natural gas inventories. The report indicated an injection of 110 billion cubic feet (Bcf) into storage for the week ended April 28th, exceeding analysts’ expectations, which ranged from 95 Bcf to 105 Bcf.

The higher-than-anticipated build suggests a softening in demand for natural gas, coupled with robust production levels. Warmer-than-usual temperatures in some regions have likely reduced demand for heating, contributing to the increase in stored gas. Furthermore, increased natural gas production from shale formations has added to the supply glut.

The news sent natural gas prices spiraling downward, with the front-month contract experiencing its largest single-day percentage decline in several months. Market participants are now reassessing their positions in light of the updated storage data, anticipating continued downward pressure on prices in the near term. The market will be closely watching weather patterns and production trends to gauge the future direction of natural gas prices.

Analysts note that the current inventory level is now above the five-year average, further reinforcing the bearish sentiment in the market. Some anticipate that prices may need to fall further to incentivize increased demand or curtail production, ultimately rebalancing the market.