Natural Gas Price Rises but So Does Storage Level

Energy

Published: March 3, 2016 11:10 am

Last Updated: January 13, 2020 12:24 pm

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 48 billion cubic feet for the week ending February 26. Analysts were expecting a storage withdrawal of around 33 billion to 47 billion cubic feet. The five-year average for the week is a withdrawal of around 137 billion cubic feet, and last year’s withdrawal for the week totaled 227 billion cubic feet. The withdrawal from storage totaled 117 billion cubic feet in the previous week.

Natural gas futures for April delivery traded down about 2.4% in advance of the EIA’s report, at around $1.64 per million BTUs, and traded around $1.67 after the data release. Last Thursday natural gas closed at $1.79 per million BTUs, the high for the past five trading days. The 52-week range for natural gas is $1.63 to $3.19, and the low was posted early Thursday. One year ago, the price for a million BTUs was around $3.10.

Warmer temperatures in the Northeast and Midwest last week cut demand for natural gas sharply. Cooler temperatures late this week will give way to rising temperatures again next week. The official storage injection season begins in April, so there is not much time left for natural gas inventories to fall. That could spell continued low prices throughout the summer and into the next heating season beginning in October.

Stockpiles are about 46% above their levels of a year ago and about 36% above the five-year average.