Natural Gas Price Rises on Larger-Than-Expected Storage Injection

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 53 billion cubic feet for the week ending August 11. Analysts were expecting a storage injection of between 41 billion and 51 billion cubic feet. The five-year average for the week is an injection of 50 billion cubic feet, and last year’s storage injection for the week totaled 22 billion cubic feet. Natural gas inventories rose by 28 billion cubic feet in the week ending August 4.

Natural gas futures for September delivery traded down about 0.3% in advance of the EIA’s report, at around $2.88 per million BTUs and rose to $2.90 shortly afterward. The highest close for the past five trading days was registered last Thursday at $2.99. The price has dropped for four consecutive trading days, and the 52-week range for natural gas is $2.75 to $3.60. One year ago the price for a million BTUs was around $2.97.

Domestic demand for natural gas in the week ahead is expected to rise into the high range as temperatures fall in the 80s and 90s in most of the country into the weekend, when some cooler weather is expected in the Midwest and Northeast. By early next week, however, hotter temperatures will prevail again.

Stockpiles fell week over week to 7.6% below last year’s level, but remain 1.8% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.082 trillion cubic feet, around 55 billion cubic feet above the five-year average of 3.027 trillion cubic feet and 254 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.336 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers reacted to today’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.6% to $76.99, in a 52-week range of $76.85 to $93.22. The low was posted earlier this morning.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.1% to $4.01. The stock’s 52-week range is $3.90 to $8.20.

EOG Resources Inc. (NYSE: EOG) traded down about 0.7% to $84.38. The 52-week range is $84.13 to $109.37. The low was posted earlier this morning.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 0.8%, at $6.54 in a 52-week range of $6.20 to $9.74.