On Thursday, natural gas futures kept their price, holding flat after a session of sharp decline.

The market is looking forward to the EIA (US Energy Information Administration) report for storage, which should give more information about the current supply of natural gas on hand.

The expectation is that those numbers will be high, and the industry is heading to the highest surplus in five years, which has kept prices from climbing as they might have otherwise.  

On Wednesday, natural gas rates fell about 5%, and there were multiple factors at work driving the prices lower. The May contract is expiring soon, and heating demand is diminishing. On top of that, the market experienced further difficulty with hindrances in smooth operations at the Freeport LNG terminal.

Gas supplies are increasing, with no end in sight for that issue. The supply is far outweighing the demand at this point, and the current estimates of 79-89 billion cubic feet of natural gas is far above the 5-year average 59 billion cubic feet.

More Bad News for Natural Gas

The market might be able to overcome its supply problem if it was not already facing a global market that is saturated with alternatives to natural gas. There are more ways than ever for consumers to heat their food and their homes, which means that natural gas demand may continue to drop from year to year, even as these supply problems are growing.

The weather forecast for the US is expected to be mostly comfortable. While cold weather may persist in the northeastern corner, much of the US is warming up, and that will lead to a diminished demand for natural gas in the coming months.

The market should expect to stay low for now with no apparent end in sight until the fall season when demand may begin to pick up.