Natural Gas Price Holds Gain Following Inventory Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 92 billion cubic feet for the week ending June 1.

Analysts were expecting a storage injection of about 92 billion cubic feet. The five-year average for the week is an injection of 104 billion cubic feet, and last year’s storage increase for the week totaled 103 billion cubic feet. Natural gas inventories rose by 96 billion cubic feet in the week ending May 25.

Natural gas futures for July delivery traded up about 2.3% in advance of the EIA’s report, at around $2.96 per million BTUs, and was essentially unchanged shortly after the report was released.

For the period between June 4 and June 10, offered the following demand outlook:

A weather system and associated cool front will sweep through the Northeast and Mid-Atlantic the next few days with showers and cooler than normal temperatures with highs of only upper 50s to lower 70s.  An upper ridge will dominate the western, central and southern US with highs of 80s to 100s, although a touch cool over the Northwest. Late in the week, hot high pressure will expand to cover most of the country besides the Northwest and Northeast with stronger than normal demand.

Total U.S. stockpiles rose week over week to 30.5% below last year’s level and are now 22% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.817 trillion cubic feet at the end of last week, around 512 billion cubic feet below the five-year average of 2.329 trillion cubic feet and 799 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.616 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers are reacting to today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.8%, at $82.75 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 5.9% to $4.63, in a 52-week range of $2.53 to $5.29.
  • EOG Resources Inc. (NYSE: EOG) traded up about 2.2% to $118.65. The 52-week range is $81.99 to $128.03.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.5%, at $23.81 in a 52-week range of $20.40 to $27.92.

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