Natural Gas Price Drops After Big Storage Addition

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 97 billion cubic feet for the week ending September 15. Analysts were expecting a storage injection of between 82 billion and 92 billion cubic feet. The five-year average for the week is an injection of 73 billion cubic feet, and last year’s storage injection for the week totaled 52 billion cubic feet. Natural gas inventories rose by 91 billion cubic feet in the week ending September 8.

Natural gas futures for October delivery traded down about 2.2% in advance of the EIA’s report, at around $3.03 per million BTUs, and traded down at $3.01 shortly afterward. The highest close for the past five trading days was registered Monday at $3.15. The 52-week range for natural gas is $2.80 to $3.62. One year ago the price for a million BTUs was around $3.10.

Overall demand is expected to be moderate to high next week with temperatures into the 80s and 90s in the south and east-central regions driving demand. Cooler weather is expected in the west and tropical system Jose is expected to cool off the Northeast coast slightly.

Stockpiles fell week over week to 3.8% 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 3.408 trillion cubic feet, around 67 billion cubic feet above the five-year average of 3.341 trillion cubic feet and 136 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.544 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 0.3%, at $80.33 in a 52-week range of $76.05 to $93.22.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.6% to $4.17. The stock’s 52-week range is $3.55 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.5% to $93.74. The 52-week range is $81.99 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 2.6%, at $6.67 in a 52-week range of $6.20 to $9.74.