Natural Gas Price Trims Loss Following Inventory Drawdown

April 19, 2018 by Paul Ausick

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 36 billion cubic feet for the week ending April 13.

Analysts were expecting a storage withdrawal of around 23 billion cubic feet. The five-year average for the week is an injection of 38 billion cubic feet, and last year’s storage increase for the week totaled 54 billion cubic feet. Natural gas inventories fell by 19 billion cubic feet in the week ending April 6.

Natural gas futures for May delivery traded down about 2% in advance of the EIA’s report, at around $2.69 per million BTUs, and moved to around $2.71 shortly after the report was released.

The forecast for overall natural gas demand next week moves up into the “high” range as cooler, stormier weather moves across the Midwest into the Northeast on Friday. Milder, cooler weather is expected across much of the country next week, pushing demand for natural gas above average levels for this time of year.

Total U.S. stockpiles fell week over week to 38.3% below last year’s level and are now 25.7% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.299 trillion cubic feet at the end of last week, around 449 billion cubic feet below the five-year average of 1.748 trillion cubic feet and 808 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.107 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 latest report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up less than 0.1% to $79.26, in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 2%, at $3.07 in a 52-week range of $2.53 to $5.87.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.8% to $113.76. The 52-week range is $81.99 to $119.00.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.9%, at $22.41 in a 52-week range of $20.40 to $31.72.