Natural Gas Prices Continue Slide Following Storage Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 29 billion cubic feet for the week ending March 30. The winter heating season, when natural gas demand typically reaches its peak, ended last week.

Analysts were expecting a storage withdrawal of around 29 billion cubic feet. The five-year average for the week is a withdrawal of 28 billion cubic feet, and last year’s storage increase for the week totaled 2 billion cubic feet. Natural gas inventories fell by 63 billion cubic feet in the week ending March 23.

Natural gas futures for May delivery traded down about 0.8% in advance of the EIA’s report, at around $2.69 per million BTUs, and slipped to around $2.67 shortly after the report was released.

The forecast for overall natural gas demand next week moves back into the “high” range as cooler weather lingers over the northern and eastern states. Cooler temperatures are expected across much of the country with only the South seeing mild and warmer weather.

Total U.S. stockpiles fell week over week to 34% below last year’s level and are now 20.4% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.354 trillion cubic feet at the end of last week, around 347 billion cubic feet below the five-year average of 1.701 trillion cubic feet and 697 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.051 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 latest report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.9%, at $75.54 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 2.9%, at $3.00 in a 52-week range of $2.53 to $6.40.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.1% at $104.09. The 52-week range is $81.99 to $119.00.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 1.5%, at $21.99 in a 52-week range of $20.40 to $31.72.