The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 1 billion cubic feet for the week ending March 11. Analysts were expecting a storage withdrawal of around 9 billion cubic feet. The five-year average for the week is a withdrawal of about 71 billion cubic feet, and last year’s withdrawal for the week totaled 43 billion cubic feet. The withdrawal from storage totaled 57 billion cubic feet in the previous week.
Natural gas futures for April delivery traded up about 0.01% in advance of the EIA’s report, at around $1.88 per million BTUs, and traded around $1.83 after the data release. Last Thursday, natural gas closed at $1.79 per million BTUs. On Wednesday NYMEX trading closed at $1.87, the high for the past five trading days. The 52-week range for natural gas is $1.61 to $3.19. The low was posted last Thursday. One year ago the price for a million BTUs was around $3.08.
Since dropping to a 17-year low last week, more short bets have been covered in the past week, driving prices up. Weather forecasts continue to call for more mild weather ahead as we approach the end of the heating season (March 31).
Cooler weather is expected for the next few days in the east and south, and that will encourage demand. But the cooling trend is moderate, about 2 to 12 degrees below normal, and that indicates that demand for natural gas will also be moderate.
Stockpiles are about 67% above their levels of a year ago and about 48% above the five-year average.
The EIA reported that U.S. working stocks of natural gas totaled about 2.478 trillion cubic feet, around 807 billion cubic feet above the five-year average of 1.671 trillion cubic feet and 998 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.480 trillion cubic feet for the same period a year ago.
Here’s how share prices of the largest U.S. natural gas producers reacting to this latest report:
Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 1.5%, at $84.11 in a 52-week range of $66.55 to $90.09.
Chesapeake Energy Corp. (NYSE: CHK) traded up about 8.3% to $4.75. The stock’s 52-week range is $1.50 to $16.98.
EOG Resources Inc. (NYSE: EOG) traded up about 1.8% to $76.34. The 52-week range is $57.15 to $101.36.
In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.9%, at $6.54 in a 52-week range of $5.78 to $15.28.
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