Natural Gas Price Steady Following Expected Storage Increase

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 10 billion cubic feet for the week ending April 7. Analysts surveyed by S&P Global Platts were expecting a storage injection of between 9 billion and 13 billion cubic feet. The five-year average for the week is an injection of around 12 billion cubic feet, and last year’s storage withdrawal for the week totaled 1 billion cubic feet. Natural gas inventories rose by 2 billion cubic feet in the week ending March 31.

April 1 marked the beginning of the natural gas injection season and we should expect the nation’s stockpiles to begin rising again. The injection season ends October 31.

Natural gas futures for May delivery traded up by about 1% in advance of the EIA’s report, at around $3.22 per million BTUs, and traded flat shortly after the data release. Natural gas closed at $3.19 per million BTUs on Wednesday, about 4.2% lower than the five-day high of $3.33 set last Thursday. The 52-week range for natural gas is $2.67 to $3.60. One year ago the price for a million BTUs was around $2.70.

Demand for natural gas is expected to be low in the coming week as high pressure systems continue to dominate in the central, southern and eastern parts of the country, with high temperatures reaching into the 60s, all the way to the 80s. Less heavily populated regions in the west and north are forecast to see milder temperatures.

Stockpiles fell week over week to about 17% below last year’s level and are now 14.6% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.061 trillion cubic feet, around 263 billion cubic feet above the five-year average of 1.798 trillion cubic feet and 416 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.477 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 down about 0.7%, at $82.43 in a 52-week range of $80.31 to $95.55.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.3% to $6.13. The stock’s 52-week range is $3.56 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.2% to $97.30. The 52-week range is $73.57 to $109.37.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.2% at $7.63 in a 52-week range of $6.36 to $9.73.