Natural Gas Price Dips on Inventory Build

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 52 billion cubic feet for the week ending September 16. Analysts were expecting a storage addition of around 52 billion cubic feet. The five-year average for the week is an injection of around 83 billion cubic feet, and last year’s storage addition for the week totaled 105 billion cubic feet. Natural gas inventories rose by 62 billion cubic feet in the week ending September 9.

Natural gas futures for November delivery traded down about 1% in advance of the EIA’s report, at around $3.06 per million BTUs, and traded near $3.03 after the data release. Natural gas closed at $3.13 per million BTUs on Wednesday, a five-day high. The 52-week range for natural gas is $2.05 to $3.02. One year ago the price for a million BTUs was around $2.99.

Natural gas prices rose to a recent high on Tuesday and Wednesday on forecasts for continued warm weather and higher demand for natural gas through the end of this month. But summer’s high temperatures are pretty much behind us now and more gas is likely to be headed for storage. The concern is that natural gas could threaten the country’s physical storage limit of around 4.3 trillion cubic feet by the time the winter heating season begins.

Stockpiles remain about 4.1% above their levels of a year ago and more than 8% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.551 trillion cubic feet, around 268 billion cubic feet above the five-year average of 3.283 trillion cubic feet and 140 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.411 trillion cubic feet for the same period a year ago.

Here’s how share prices 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, traded up about 0.6%, at $83.76 in a 52-week range of $71.55 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.5% to $6.83. The stock’s 52-week range is $1.50 to $9.55.

EOG Resources Inc. (NYSE: EOG) traded down about 1% to $92.56. The 52-week range is $57.15 to $95.93.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) also traded down about 1.3%, at $8.87 in a 52-week range of $5.78 to $11.36.