Natural Gas Price Dip on Large Addition to Storage

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 91 billion cubic feet for the week ending September 8. Analysts were expecting a storage injection of between 72 billion and 83 billion cubic feet. The five-year average for the week is an injection of 63 billion cubic feet, and last year’s storage injection for the week totaled 62 billion cubic feet. Natural gas inventories rose by 65 billion cubic feet in the week ending September 1.

Natural gas futures for October delivery traded down about 0.2% in advance of the EIA’s report, at around $3.08 per million BTUs, and traded down at $3.05 shortly afterward. The highest close for the past five trading days was registered Wednesday at $3.06. The 52-week range for natural gas is $2.80 to $3.62. One year ago the price for a million BTUs was around $3.04.

Hurricane Irma dampened demand less than expected, and now that cooler weather is spreading across the country, demand is expected to decline as temperatures drop.

Overall demand is expected to be moderate again next week with temperatures in the heavily populated eastern United States rising into the 80s and 90s, pushing demand in the region higher to offset lower temperatures in the rest of the country.

Stockpiles fell week over week to 5.1% below last year’s level but remain 1.3% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.31 trillion cubic feet, around 43 billion cubic feet above the five-year average of 3.268 trillion cubic feet and 179 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.490 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 up about 0.4%, at $80.11 in a 52-week range of $76.05 to $93.22.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 5.6% to $4.16. The stock’s 52-week range is $3.55 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded up about 1.7% to $92.64. The 52-week range is $81.99 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.7%, at $6.82 in a 52-week range of $6.20 to $9.74.