Natural Gas Price Rises After Record-Setting Injection Season

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 52 billion cubic feet for the week ending October 30. Analysts were expecting a storage injection (increase) of around 58 billion cubic feet. The five-year average for the week is an increase of around 58 billion cubic feet, and last year’s addition for the week totaled 90 billion cubic feet.

Natural gas futures for December delivery traded up about 2.2% in advance of the EIA’s report, at around $2.31 per million BTUs, and rose about two cents after the data release to trade at $2.33, up seven cents over Wednesday’s closing price. Last Thursday natural gas closed at $2.26 per million BTUs, and over the past five trading days natural gas futures peaked at around $2.32 on Wednesday. A new 52-week low of $2.19 was posted last Friday. The 52-week high for natural gas futures is $4.18. One year ago the price for a million BTUs was around $4.11.

Temperatures are expected to be cooler across the West for the next few days, while the Midwest basks in above normal warmth. By the weekend the cool weather is expected to move across the Midwest and the Northeast, followed by another warm spell in the New England and along the Atlantic Coast. As a result, demand for natural gas is predicted to be low through the next seven days.

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Stockpiles are more than 10% above their levels of a year ago and about 3.9% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.929 trillion cubic feet, around 147 billion cubic feet above the five-year average of 3.782 trillion cubic feet and 371 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.877 trillion cubic feet for the same period a year ago.

This year’s total at the end of the injection season (March through October) is the highest ever, some 21 billion cubic feet above the 3.908 trillion cubic feet posted in 2010.

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 down about 0.9% to $85.25, in a 52-week range of $66.55 to $97.20.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.9% to $7.32. The stock’s 52-week range is $6.01 to $24.43.

EOG Resources Inc. (NYSE: EOG) traded down about 1% to $85.64. The 52-week range is $68.15 to $103.04.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 2.5%, at $9.81 in a 52-week range of $9.35 to $23.73.

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