Natural Gas Price Gains After Storage Withdrawal

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 182 billion cubic feet for the week ending December 15. Analysts were expecting a storage withdrawal of around 175 billion cubic feet. The five-year average for the week is a withdrawal of 125 billion cubic feet, and last year’s storage withdrawal for the week totaled 200 billion cubic feet. Natural gas inventories fell by 69 billion cubic feet in the week ending December 8.

Natural gas futures for February delivery traded down about 0.6% in advance of the EIA’s report, at around $2.62 per million BTUs, and traded up at around $2.65 shortly after the report was released.

Colder weather hits the Rockies and Plains ahead of the weekend and the cold weather will move south, bringing temperatures down into the teens and 20s in north Texas and parts of the South. In the East, temperatures are expected to be warmer until Christmas Day, when they drop again. Overall demand for natural gas is expected to be in the high range for the next week.

Total U.S. stockpiles fell week over week to 5% below last year’s level and are now 2.4% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.444 trillion cubic feet, around 84 billion cubic feet below the five-year average of 3.528 trillion cubic feet and 183 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.627 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 up about 0.7% to $83.60, in a 52-week range of $76.05 to $91.34.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.2%, at $3.82 in a 52-week range of $3.41 to $7.65.
  • EOG Resources Inc. (NYSE: EOG) traded up about 2.1% to $105.67. The 52-week range is $81.99 to $107.95.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.2%, at $5.24 in a 52-week range of $5.14 to $9.74.