Natural Gas Not Helped by Storms

NEW YORK (TheStreet) -- Natural gas storage levels dropped in line with expectations last week, but the market was clearly expecting winter weather to have resulted in bigger withdrawals as futures slumped through Thursday's session.

In its weekly estimate, the Energy Information Administration reported Thursday that inventory in the nation's lower 48 states fell by 172 billion cubic feet last week. In the aftermath, stock levels stood at 1.853 trillion cubic feet.

The withdrawal came in at the higher range of Street expectations. Analysts surveyed by Platts had forecast a fall between 168 billion to 172 billion cubic feet.

Historical figures highlighted in the report showed last week's storage levels dropped 2.9% from a year ago and were up a mere 0.7% compared with the five-year average.

The April natural gas delivery contract lost 9 cents, or 1.9%, to settle at $4.77 per million British thermal units.

Crude for April delivery plunged $1.83, or 2.3%, to settle at $78.17 a barrel after again testing the $80 mark on Wednesday. Oil prices were falling alongside equities after a Labor Department report showed an unexpected uptick in new unemployment benefit applications.

A separate report showed new orders for durable goods rose 3% last month, though fell short of expectations after excluding transportation items.

The downbeat economic news, along with continuing concerns about Greece's sovereign debt, lifted the value of the dollar for most of the day's session, pressuring crude prices. By the end of the day, however, the dollar index was trading 0.1% lower.

The NYSE Arca Oil Index finished the day off by 0.7%, while the Philadelphia Oil Service Sector Index rose 0.1%.

Among the major integrated firms, Exxon Mobil(XOM) shed 41 cents, or 0.6%, to close at $65.14, and Chevron(CVX) lost 23 cents, or 0.3%, to close at $72.11.

Frontier Oil(FTO) shares finished the session down by 2% at $12.55 after it reported a disappointing loss in the morning. Slumping refining margins forced the firm to report a larger-than-anticipated loss of 72 cents a share. Analysts surveyed by Thomson Reuters anticipated a slimmer 47-cent a share loss.

Elsewhere on the Nymex, April heating oil lost nearly 6 cents, or 2.7% to settle at $1.98 a gallon, while April gasoline gained 5 cents, or 2.3%, to settle at $2.15 a gallon.

Reviewing weekly data from the Energy Information Administration, Barclays Capital analyst Costanza Jacazio said, "Gasoline readings were the strongest component of the data, with the implied reading for gasoline demand increasing more than 500,000 barrels per day week over week to above 9 million barrels per day for the first time this year, helping pare back inventory overhang."

--Written by Sung Moss and Melinda Peer in New York.

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