Energy

Slower Natural Gas Inventory Growth Gives Prices a Boost

Blue flames of gas stove
Source: Thinkstock
The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 75 billion cubic feet for the week ending August 22. That compared with an expected increase of 78 billion cubic feet anticipated by analysts. The five-year average gain for the week is 58 billion cubic feet.

Natural gas futures were trading up about 0.9% in advance of the EIA’s report, at around $4.04 per million BTUs, and rose briefly to $4.10 immediately following the report. Natural gas futures have risen by about $0.12 per million BTUs since last week.

Stockpiles are about 15.7% below their levels of a year ago and about 16.5% below the five-year average. The rise in U.S. stockpiles is still on course for a record April through October injection record.

Between April 4 and August 15, natural gas storage injections totaled 1.73 trillion cubic feet, compared with a total of 1.36 trillion cubic feet in the same period a year ago. The five-year average for that 20-week period is 1.28 trillion cubic feet. Because inventories were run so low during the unusually cold winter of 2013 and 2014, the EIA expects the end-of-October total to be 3.46 trillion cubic feet, the lowest total since 2008. But the large injections have kept the commodity price low so far this summer partly because demand for cooling has been low.

The EIA reported that U.S. working stocks of natural gas totaled 2.63 trillion cubic feet, about 518 billion cubic feet below the five-year average of 3.15 trillion cubic feet. Working gas in storage totaled 3.12 trillion cubic feet for the same period a year ago. Natural gas inventories continue to rise but remain well below the bottom of the five-year range.

Here is how stocks of the largest U.S. natural gas producers reacted to this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was down about 0.1%, at $99.43 in a 52-week range of $84.79 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up about 1.3%, at $26.79 in a 52-week range of $22.63 to $29.92.

EOG Resources Inc. (NYSE: EOG) was up about 0.1% to $108.70. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was up about 1%, at $22.11 in a 52-week range of $16.59 to $27.89.

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