Natural Gas Price Ticks Higher on Small Inventory Decrease

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 3 billion cubic feet for the week ending April 8. The five-year average for the week is an injection of around 22 billion cubic feet, and last year’s storage addition for the week totaled 101 billion cubic feet. Natural gas inventories rose by 12 billion cubic feet in the prior week.

Natural gas futures for May delivery traded down about 2.8% in advance of the EIA’s report, at around $1.98 per million BTUs, and traded around $2.01 after the data release. Last Thursday natural gas closed at $2.02 per million BTUs. On Wednesday the contract posted its high for the past five trading days at $2.04. The 52-week range for natural gas is $1.73 to $3.17. One year ago the price for a million BTUs was around $2.95.

The EIA expects the summer build in working natural gas inventories to total about 1.6 trillion. That represents a relatively small summer build because injections are expected to be limited by available storage capacity. Recent data show that natural gas storage facilities in most regions of the United States already hold 44% to 73% of their design capacity. The forecast build puts inventories at the end of October at a record high.

Demand for natural gas is expected to be low over the whole country into the middle of next week.

Stockpiles are about 63% above their levels of a year ago and about 52% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.477 trillion cubic feet, around 849 billion cubic feet above the five-year average of 1.628 trillion cubic feet and 956 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.521 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers reacting to this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.6% at $85.30 in a 52-week range of $66.55 to $90.09.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.4% to $6.03. The stock’s 52-week range is $1.50 to $16.98.

EOG Resources Inc. (NYSE: EOG) traded up about 0.7% to $78.32. The 52-week range is $57.15 to $101.36.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1.3%, at $6.82 in a 52-week range of $5.78 to $15.28.