Natural Gas Price Ticks Higher on Inventory Increase

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 111 billion cubic feet for the week ending June 5. Analysts expected a storage injection (increase) of 111 billion cubic feet. The five-year average for the week is an increase of around 89 billion cubic feet.

Natural gas futures for July delivery traded down about 0.3% in advance of the EIA’s report, at around $2.88 per million BTUs, and ticked higher to around $2.90 (down about 0.2% for the day) following release of the report. Last Thursday, natural gas closed at $2.63 per million BTUs and natural gas futures peaked at around $2.92 earlier this week. The 52-week low for natural gas futures is $2.54. One year ago, the price for a million BTUs was around $4.23.

Warm to very warm temperatures have been and will continue to be pushing up demand for natural gas as demand for electricity to run air-conditioning rises. Temperatures are expected to be in the 90s in the southeast and Texas. Demand for heating or cooling will be low in most of the rest of the country, driving down overall demand for natural gas.

Stockpiles are about 47% above their levels of a year ago and nearly 2% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.344 trillion cubic feet, around 44 billion cubic feet above the five-year average of 2.3 trillion cubic feet and 753 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.591 trillion 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 the latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 2%, at $85.36 in a 52-week range of $82.68 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 4%, at $12.54 in a 52-week range of $12.46 to $29.92. The low was set Thursday.

EOG Resources Inc. (NYSE: EOG) traded up less than 0.1% to $90.46. The 52-week range is $81.07 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.3%, at $13.98 in a 52-week range of $12.28 to $26.42.