Natural Gas Prices Rise on Smaller-Than-Expected Storage Increase

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 46 billion cubic feet for the week ending June 23. Analysts were expecting a storage injection of 52 billion cubic feet. The five-year average for the week is an injection of 72 billion cubic feet, and last year’s storage injection for the week totaled 41 billion cubic feet. Natural gas inventories rose by 61 billion cubic feet in the week ending June 16.

Natural gas futures for August delivery traded down about 0.3% in advance of the EIA’s report, at around $3.08 per million BTUs, and rose to around $3.11 shortly thereafter. The highest close for the past five trading days was registered Wednesday at $3.09. The 52-week range for natural gas is $2.82 to $3.62. One year ago the price for a million BTUs was around $3.09.

Natural gas is in focus as the administration’s theme for the week is energy. The president wants to export more U.S. liquefied natural gas (LNG) to Europe, reducing the continent’s dependence on Russian supplies, and to boost exports to China, as well as expanding exports to Japan and India. Some industry analysts say that the president, unlike his predecessor, sees U.S. LNG supplies as a way to reduce the bilateral trade agreements that the new administration is pushing.

Domestic demand for natural gas in the week ahead is expected to be moderate as cooler than normal temperatures remain along the northern part of the country until the weekend. Temperatures in the West and in the Texas will continue to be hot, and demand is expected to be high by this time next week.

Stockpiles fell week over week to 10.2% below last year’s level, but they remain 6.9% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.816 trillion cubic feet, around 181 billion cubic feet above the five-year average of 2.635 trillion cubic feet and 319 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.135 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 the latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.2%, at $81.68 in a 52-week range of $79.26 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 3.2% to $5.01. The stock’s 52-week range is $4.13 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded up about 1% to $89.93. 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 $6.43 to $9.73.