Natural Gas Inventory Now Above 5-Year Average

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 87 billion cubic feet for the week ending January 27. Analysts were expecting a storage decline ranging from 83 billion to 94 billion cubic feet. The five-year average for the week is a withdrawal of around 166 billion cubic feet, and last year’s storage decline for the week totaled 152 billion cubic feet. Natural gas inventories fell by 119 billion cubic feet in the week ending January 20.

Natural gas futures for March delivery traded down by about 1.33% in advance of the EIA’s report, at around $3.13 per million BTUs, and traded flat immediately after the data release. Natural gas closed at $3.17 per million BTUs on Wednesday, after falling from a high of $3.50 last Thursday. The 52-week range for natural gas is $2.47 to $3.83. One year ago the price for a million BTUs was around $2.74.

Shifting weather patterns over the past few weeks have taken natural gas prices from a recent high of around $3.50 down more than $0.30 per million BTUs. That volatility could continue as colder weather is forecast across the northern part of the country, along with milder temperatures in the West and South. Demand for the coming week is expected to be moderate.

Stockpiles have now dropped to 8.9% below their levels of a year ago and risen to 2.2% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.711 trillion cubic feet, around 59 billion cubic feet above the five-year average of 2.652 trillion cubic feet and 266 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.977 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 report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down less than 0.1% at $82.91 in a 52-week range of $77.56 to $95.55.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.9% to $6.28. The stock’s 52-week range is $1.50 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded down about 1.2% to $99.77. The 52-week range is $62.53 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.4% at $7.88 in a 52-week range of $5.78 to $9.74.