Natural Gas Price Ticks Higher on Storage Withdrawal

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 18 billion cubic feet for the week ending November 10. Analysts surveyed by S&P Global Platts were expecting a storage withdrawal of around 14 billion cubic feet. The five-year average for the week is an injection of 15 billion cubic feet, and last year’s storage injection for the week totaled 34 billion cubic feet. Natural gas inventories rose by 15 billion cubic feet in the week ending November 3.

Natural gas futures for December delivery traded up about 0.4% in advance of the EIA’s report, at around $3.09 per million BTUs, and it traded at about $3.11 shortly after the report was released. The highest close for the past five trading days was registered last Friday at $3.21. The 52-week range for natural gas is $2.85 to $3.75. One year ago the price for a million BTUs was around $3.12.

Demand is expected to be moderate for the rest of this week with warmer temperatures in the central and southern states and mild weather in most of the West. The weekend forecast calls for a strong blast of cold across the Great Lakes, Northeast and Mid-Atlantic states, even pushing into the south. Overall demand will start off moderate, rising to high by this time next week.

Total U.S. stockpiles fell week over week to 6.7% below last year’s level and remain 2.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.772 trillion cubic feet, around 101 billion cubic feet below the five-year average of 3.873 trillion cubic feet and 271 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 4.043 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 1.3%, at $80.18 in a 52-week range of $76.05 to $93.22.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.4%, at $3.90 in a 52-week range of $3.41 to $8.20.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.5% to $101.84. The 52-week range is $81.99 to $109.37.

Also, the United States Natural Gas ETF (NYSEAMERICAN: UNG) traded down about 0.2% at $6.32 in a 52-week range of $5.86 to $9.74.