Natural Gas Price Ticks Higher on Inventory Rise

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 91 billion cubic feet for the week ending May 18.

Analysts were expecting a storage injection 92 billion cubic feet. The five-year average for the week is an injection of 89 billion cubic feet, and last year’s storage increase for the week totaled 74 billion cubic feet. Natural gas inventories rose by 106 billion cubic feet in the week ending May 11.

Natural gas futures for June delivery traded down about 1.3% in advance of the EIA’s report, at around $2.91 per million BTUs, and rose to around $2.92 shortly after the report was released. Prices nearly reached $3 on Wednesday, a price last seen in late January.

The forecast for overall natural gas demand next week is expected to be “moderate” as warm to hot temperatures settle in over the central and southern United States. Rain and cooler temperatures will lower demand for cooling in the West and Southeast, while temperatures in the Northeast are forecast to warm next week.

Total U.S. stockpiles rose week over week to 33% below last year’s level and are now 23.4% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.629 trillion cubic feet at the end of last week, around 499 billion cubic feet below the five-year average of 2.128 trillion cubic feet and 804 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.433 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 today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 2.4%, at $80.21 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.8%, at $4.55 in a 52-week range of $2.53 to $5.68.
  • EOG Resources Inc. (NYSE: EOG) traded down about 2.1% to $120.38. The 52-week range is $81.99 to $128.03.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.3%, at $23.99 in a 52-week range of $20.40 to $29.96.