Natural Gas Price Slips as Storage Increase Tops Forecast

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 61 billion cubic feet for the week ending June 16. Analysts were expecting a storage injection of 58 billion cubic feet. The five-year average for the week is an injection of 82 billion cubic feet, and last year’s storage injection for the week totaled 63 billion cubic feet. Natural gas inventories rose by 78 billion cubic feet in the week ending June 9.

Natural gas futures for August delivery traded up about 1% in advance of the EIA’s report, at around $2.92 per million BTUs, and slipped to around $2.90 shortly thereafter. The highest close for the past five trading days was registered last Thursday at $3.08 and closed at $2.92 on Wednesday. The 52-week range for natural gas is $2.82 to $3.62. One year ago the price for a million BTUs was around $3.02.

Natural gas prices touched a three-month low earlier this week at around $2.88 per million BTUs but are expected to rise as summer weather takes hold late this week and into next week. Record high temperatures in the Southwest could moderate somewhat and states around the Great Lakes and in the East are expected to see lower temperatures in the next couple of days, ahead of rising temperatures early next week. Demand for the next week is expected to be moderate.

Stockpiles fell week over week to 10.5% below last year’s level, but remain 8.1% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.770 trillion cubic feet, around 207 billion cubic feet above the five-year average of 2.563 trillion cubic feet and 324 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.094 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 less than 0.1%, at $81.41 in a 52-week range of $79.26 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.7% to $4.59. The stock’s 52-week range is $3.93 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded up about 1.3% to $88.26. The 52-week range is $78.04 to $109.37.

The United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.1%, at $6.59 in a 52-week range of $6.44 to $9.73.