Natural Gas Price Rise Slightly on Small Inventory Build

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 17 billion cubic feet for the week ending July 21. Analysts surveyed by S&P Global Platts were expecting a storage injection of between 17 billion and 27 billion cubic feet. The five-year average for the week is an injection of 47 billion cubic feet, and last year’s storage injection for the week totaled 20 billion cubic feet. Natural gas inventories rose by 28 billion cubic feet in the week ending July 14.

Natural gas futures for September delivery traded up about 0.1% in advance of the EIA’s report, at around $2.93 per million BTUs and ticked higher to around $2.96 shortly thereafter. The highest close for the past five trading days was registered last Thursday at $3.03. The 52-week range for natural gas is $2.80 to $3.60. One year ago the price for a million BTUs was around $3.01.

Domestic demand for natural gas in the week ahead is expected to moderate somewhat compared with high demand for the past two weeks. Hot temperatures over the eastern states are expected to give way to cooler weather over the weekend and gradually move through the southeast. The respite in the south is expected to end later next week with more hot temperatures. Overall demand is forecast to be moderate to high.

Stockpiles fell week over week to 9.2% below last year’s level, but remain 3.9% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.990 trillion cubic feet, around 111 billion cubic feet above the five-year average of 2.879 trillion cubic feet and 302 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.292 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 0.3%, at $80.16 in a 52-week range of $79.26 to $93.22.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.3% to $4.86. The stock’s 52-week range is $4.38 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded up 0.1% to $94.87. The 52-week range is $78.26 to $109.37.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 2.1%, at $6.69 in a 52-week range of $6.33 to $9.74.