Natural Gas Price Bounces Higher After Inventory Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 89 billion cubic feet for the week ending February 17. Analysts were expecting a storage decline of between 86 billion and 97 billion cubic feet. The five-year average for the week is a withdrawal of around 158 billion cubic feet, and last year’s storage decline for the week totaled 117 billion cubic feet. Natural gas inventories fell by 114 billion cubic feet in the week ending February 10.

Natural gas futures for April delivery traded up by about 2% in advance of the EIA’s report, at around $2.76 per million BTUs, and they traded at $2.78 shortly after the data release. Natural gas closed at $2.81 per million BTUs on Wednesday, after falling from a high of $3.06 last Thursday. The 52-week range for natural gas is $2.31 to $3.65. One year ago the price for a million BTUs was around $2.36.

Demand for natural gas is expected to be low over the course of the next week as warmer weather will once again blanket much of the country through the weekend. Along the west coast another rainstorm passes through and will move across the country later in the week. Overall, temperatures in the United States should return to being slightly above normal next week.

Stockpiles have now dropped to 10% below their levels of a year ago and have reached 7.1% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.356 trillion cubic feet, around 156 billion cubic feet above the five-year average of 2.200 trillion cubic feet and 261 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.617 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 today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.8%, at $81.57 in a 52-week range of $80.02 to $95.55.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.1% to $5.91. The stock’s 52-week range is $2.50 to $8.20. Chesapeake reported quarterly and full-year results this morning.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $97.70. The 52-week range is $62.53 to $109.37.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 2.5%, at $6.74 in a 52-week range of $5.78 to $9.74.