Natural Gas Price Remains Low as Heating Season Approaches

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 51 billion cubic feet for the week ending October 13. Analysts were expecting a storage injection of between 52¬†billion and 62 billion cubic feet. The five-year average for the week is an injection of 78 billion cubic feet, and last year’s storage injection for the week totaled 77 billion cubic feet. Natural gas inventories rose by 87 billion cubic feet in the week ending October 6.

Natural gas futures for November delivery traded roughly flat in advance of the EIA’s report, at around $2.86 per million BTUs, and traded down slightly at $2.84 shortly after the report was released. The highest close for the past five trading days was registered on Friday at $3.00. The 52-week range for natural gas is $2.83 to $3.65. One year ago the price for a million BTUs was around $3.37.

Temperatures in the 60s and 70s will cover most of the nation through the weekend, with the exception of an unseasonably warm Southwest. Cooler temperatures are expected in the north-central, Great Lakes and northeastern states later in the week. Overall demand is forecast to be low through the next seven days.

Total U.S. stockpiles fell week over week to 4.7% below last year’s level and remain 1% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.646 trillion cubic feet, around 35 billion cubic feet below the five-year average of 3.681 trillion cubic feet and 179 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.825 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 roughly flat at $82.78, in a 52-week range of $76.05 to $93.22.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.6% to $3.83. The stock’s 52-week trading range is $3.55 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.4% to $96.23. The 52-week range is $81.99 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1.2%, at $6.26 in a 52-week range of $6.15 to $9.74.