Natural Gas Price Jumps on Smaller Storage Addition

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 81 billion cubic feet for the week ending April 24. Analysts expected a storage injection (increase) of 87 billion cubic feet. The five-year average for the week is an increase of around 55 billion cubic feet.

Natural gas futures for June delivery traded down about 1.2% in advance of the EIA’s report, at around $2.56 per million BTUs, and they jumped to around $2.68 (up about 2.3% for the day) following release of the report. Last Thursday, natural gas closed at $2.58 per million BTUs, and natural gas futures have dropped only slightly over the past five trading days. The 52-week low for natural gas futures is $2.48. One year ago, the price for a million BTUs was around $4.20.

As spring weather spreads across the country, demand for natural gas has slowed. Cooler temperatures over the Great Lakes region earlier this week will give way to warmer temperatures moving up from the South. Demand for natural gas for heating is expected to be low this week and very low next week.

Stockpiles are about 76.5% above their levels of a year ago and about 4.2% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.71 trillion cubic feet, around 75 billion cubic feet below the five-year average of 1.79 trillion cubic feet and 741 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 969 billion cubic feet for the same period a year ago.

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Here is how stocks 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 fractionally to $87.88, in a 52-week range of $82.68 to $104.76. The company reported first-quarter results Thursday morning.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.6%, at $14.89 in a 52-week range of $13.38 to $29.92.

EOG Resources Inc. (NYSE: EOG) traded up about 0.6% to $99.11. The 52-week range is $81.07 to $118.89.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 4.5%, at $13.36 in a 52-week range of $12.28 to $26.88.