Natural Gas Price Ticks Down After Storage Report Shows Larger Gain

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The U.S. Energy Information Administration (EIA) reported Friday morning that U.S. natural gas stocks increased by 78 billion cubic feet for the week ending June 29.

Analysts were expecting a storage injection of around 75 billion cubic feet. The five-year average for the week is an injection of 70 billion cubic feet, and last year’s storage increase for the week totaled 60 billion cubic feet. Natural gas inventories rose by 66 billion cubic feet in the week ending June 22.

Natural gas futures for July delivery traded up about 0.3% in advance of the EIA’s report, at around $2.85 per million BTUs, and slipped to $2.83 shortly after the report was released.

For the period between July 6 and July 12, NatGasWeather.com predicts “high” demand and offers the following outlook:

A weak system with showers and thunderstorms will provide cooling across the East Friday and Saturday as highs drop into the 70s and 80s. The rest of the country will be very warm to hot as upper high pressure dominates with highs reaching the upper 80s to 100s, hottest over the Southwest and Texas. The hot ridge will build back across the eastern US early next week with highs of upper 80s to 90s returning, bringing an increase in demand back to above normal levels. Weak cooling is expected into the far Northwest and Northeast late next week. Overall, demand will be easing this weekend, then increasing again next week back to HIGH.

Total U.S. stockpiles rose week over week to 25% below last year’s level and are now 18.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.152 trillion cubic feet at the end of last week, around 493 billion cubic feet below the five-year average of 2.645 trillion cubic feet and 717 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.869 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 0.1%, at $82.37 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.2%, at $5.28 in a 52-week range of $2.53 to $5.44.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.5%, at $123.84. The 52-week range is $81.99 to $128.03.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.4% to $23.05, in a 52-week range of $20.40 to $27.92.