Natural Gas Price Bounces Following Inventory Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 68 billion cubic feet for the week ending March 3. Analysts were expecting a storage decline of 59 billion cubic feet. The five-year average for the week is a withdrawal of around 136 billion cubic feet, and last year’s storage decline for the week totaled 57 billion cubic feet. Natural gas inventories rose by 7 billion cubic feet in the week ending February 24.

Natural gas futures for April delivery traded up by about 2% in advance of the EIA’s report, at around $2.95 per million BTUs, and traded at $2.98 shortly after the data release. Natural gas closed at $2.95 per million BTUs on Wednesday, equal to a weekly high posted Monday. The 52-week range for natural gas is $2.53 to $3.65. One year ago the price for a million BTUs was around $2.58.

Demand for natural gas is expected to be low over most of the country for the next few days. Demand will then rise later this week as a series of storms push rain and snow and low temperatures across the Great Lakes region and into the Northeast. Overall demand for the next week is expected to be moderate.

Stockpiles fell week over week to 7.7% below last year’s level, and they have reached 18.8% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.295 trillion cubic feet, around 363 billion cubic feet above the five-year average of 1.932 trillion cubic feet and 192 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.487 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 down less than 0.1%, at $81.00 in a 52-week range of $80.31 to $95.55. The low was posted this morning.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.7% to $4.90. The stock’s 52-week range is $3.53 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded down about 0.8% to $94.04. The 52-week range is $69.66 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.4% at $7.14 in a 52-week range of $6.14 to $9.74.