Natural Gas Price Rises on Lower-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 28 billion cubic feet for the week ending August 4. Analysts were expecting a storage injection of between 32 and 42 billion cubic feet. The five-year average for the week is an injection of 54 billion cubic feet, and last year’s storage injection for the week totaled 29 billion cubic feet. Natural gas inventories rose by 20 billion cubic feet in the week ending July 28.

Natural gas futures for September delivery traded up about 0.6% in advance of the EIA’s report, at around $2.90 per million BTUs, and rose to around $3.94 shortly afterward. The highest close for the past five trading days was registered Wednesday at $2.88. The 52-week range for natural gas is $2.75 to $3.60. One year ago the price for a million BTUs was around $2.97.

Domestic demand for natural gas in the week ahead is expected to remain in the moderate range as cooler weather continues to dominate in central and northern states where high temperatures are forecast to reach the 70s and 80s. The West and South are expected to see hot temperatures with areas of heavy rain and thunderstorms.

Stockpiles fell week over week to 8.3% below last year’s level, but remain 2% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.038 trillion cubic feet, around 61 billion cubic feet above the five-year average of 2.977 trillion cubic feet, as well as 275 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.313 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 0.4%, at $79.13 in a 52-week range of $78.27 to $93.22.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.9% to $4.41. The stock’s 52-week range is $4.32 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $90.57. The 52-week range is $85.88 to $109.37.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 2.1%, at $6.60 in a 52-week range of $6.20 to $9.74.