Natural Gas Price Dips on Smaller-Than-Expected Storage Draw

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 53 billion cubic feet for the week ending March 10. Analysts were expecting a storage decline of 56 billion cubic feet. The five-year average for the week is a withdrawal of around 85 billion cubic feet, and last year’s storage decline for the week totaled 9 billion cubic feet. Natural gas inventories fell by 68 billion cubic feet in the week ending March 3.

Natural gas futures for April delivery traded down by about 2% in advance of the EIA’s report, at around $2.93 per million BTUs, and traded at $2.90 shortly after the data release. Natural gas closed at $2.98 per million BTUs on Wednesday, well below a weekly high posted Monday of $3.09. The 52-week range for natural gas is $2.56 to $3.65. One year ago the price for a million BTUs was around $2.60.

Demand for natural gas is expected to be moderate over the eastern United States following the recent unseasonal snowstorms. Temperatures should moderate over the weekend before dropping again by the middle of next week, pushing demand for gas higher.

Stockpiles fell week over week to 9.5% below last year’s level, and they have reached 21.4% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.242 trillion cubic feet, around 395 billion cubic feet above the five-year average of 1.847 trillion cubic feet and 236 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.478 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 down about 0.2%, at $81.90 in a 52-week range of $80.31 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.3% to $5.38. The stock’s 52-week range is $3.53 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded down about 0.6% to $96.43. The 52-week range is $69.66 to $109.37.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 2%, at $7.05 in a 52-week range of $6.28 to $9.74.