Natural Gas Prices Move Higher on Large Storage Draw

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 288 billion cubic feet for the week ending January 19.

Analysts were expecting a storage withdrawal of between 260 billion and 275 billion cubic feet. The five-year average for the week is a withdrawal of 164 billion cubic feet, and last year’s storage withdrawal for the week totaled 119 billion cubic feet. Natural gas inventories fell by 183 billion cubic feet in the week ending January 12.

Natural gas futures for March delivery traded up about 1% in advance of the EIA’s report, at around $3.10 per million BTUs, and moved up to around $3.14 shortly afterward.

Temperatures are expected to moderate over most of the country beginning this weekend. Highs will reach into the 40s and 50s in the Northeast, while the South could see highs near 70. Colder weather in the West will move inland next week, bring snow and rain to the Midwest before continuing east. Overall demand for natural gas is forecast to be “moderate” for the coming week but is expected to rise to the “high” range by the middle of next week.

Total U.S. stockpiles fell week over week to 18.4% below last year’s level and are now also 17.5% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.296 trillion cubic feet, around 486 billion cubic feet below the five-year average of 2.782 trillion cubic feet and 519 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.815 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 the report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.3%, at $88.81 in a 52-week range of $76.05 to $88.92.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.1%, at $4.09 in a 52-week range of $3.41 to $7.29.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.4% to $118.01. The 52-week range is $81.99 to $119.00. The high was set earlier this morning.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.6%, at $26.13 in a 52-week range of $20.40 to $35.00.