Natural Gas Futures Suffer Another Setback Amid Record Supply Build

Natural gas futures fell on Thursday after a larger-than-expected US supply build. The energy commodity continues to struggle this summer, with hotter-than-normal temperatures forecasted for September.

September natural gas futures dropped $0.083 (2.96%) to $2.721 per million British thermal units (Btu) at 18:15 GMT on Thursday on the New York Mercantile Exchange. Despite being on track for a weekly gain of more than 3%, prices remain down almost 14% year-to-date.

The US Energy Information Administration reported that domestic natural gas inventories rose 36 billion cubic feet, exceeding economists' expectations of 31 billion cubic feet, for the week ending August 7. This build was driven by the Midwest (20 billion cubic feet) and the East (15 billion cubic feet).

Totally, US natural gas supplies stand at 3.153 trillion cubic feet, little changed from a year ago but close to 7% above the five-year average of 2.955 trillion cubic feet.