Natural Gas Price Steady Following Addition to US Supply

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 106 billion cubic feet for the week ending May 11.

Analysts were expecting a storage injection of between 97 billion and 109 billion cubic feet. The five-year average for the week is an injection of 87 billion cubic feet, and last year’s storage increase for the week totaled 68 billion cubic feet. Natural gas inventories rose by 89 billion cubic feet in the week ending May 4.

Natural gas futures for June delivery traded down about 0.6% in advance of the EIA’s report, at around $2.80 per million BTUs, and were basically unchanged shortly after the report was released.

The forecast for overall natural gas demand next week remains in the “low” range, with wetter but still mild weather across the east and west coasts of the country through the weekend. Most of the country will see warmer weather next week, but still not “hot” in all but some portions of the South.

Total U.S. stockpiles rose week over week to 34.8% below last year’s level and are now 24.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.538 trillion cubic feet at the end of last week, around 520 billion cubic feet below the five-year average of 2.039 trillion cubic feet and 821 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.359 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 down about 0.1%, at $81.94 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 5.7%, at $4.16 in a 52-week range of $2.53 to $5.87.
  • EOG Resources Inc. (NYSE: EOG) traded up about 2.6% to $124.62. The 52-week range is $81.99 to $124.69 and the high was posted this morning.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.5%, at $22.84 in a 52-week range of $20.40 to $30.88.