Natural Gas Price Ticks Up as Inventory Dips More Than Expected

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 194 billion cubic feet for the week ending February 9.

Analysts were expecting a storage withdrawal of around 183 billion cubic feet. The five-year average for the week is a withdrawal of 154 billion cubic feet, and last year’s storage withdrawal for the week totaled 114 billion cubic feet. Natural gas inventories fell by 119 billion cubic feet in the week ending February 2.

Natural gas futures for March delivery traded up about 0.6% in advance of the EIA’s report, at around $2.59 per million BTUs, and rose shortly afterward to $2.60.

The forecast for overall natural gas demand next week calls for “moderate” demand as temperatures remain mild in East and South before dipping over the weekend. Warmer temperatures are expected over most of the country by early next week. In the West and Midwest, though, some cold weather is mixed in.

Total U.S. stockpiles fell week over week to 19.5% below last year’s level and are now also 15.9% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.884 trillion cubic feet at the end of last week, around 433 billion cubic feet below the five-year average of 2.317 trillion cubic feet and 577 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.461 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 this report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 1.2% to $75.53, in a 52-week range of $73.90 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.3%, at $2.77 in a 52-week range of $2.53 to $6.59.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.5% to $106.21. The 52-week range is $81.99 to $119.00.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 1.6%, at $21.64 in a 52-week range of $20.40 to $31.72.