Natural Gas Price Ticks Down on Smaller Inventory Gain

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 51 billion cubic feet for the week ending July 6.

Analysts were expecting a storage injection of around 56 billion cubic feet. The five-year average for the week is an injection of 77 billion cubic feet, and last year’s storage increase for the week totaled 59 billion cubic feet. Natural gas inventories rose by 78 billion cubic feet in the week ending June 29.

Natural gas futures for August delivery traded down about 0.4% in advance of the EIA’s report, at around $2.82 per million BTUs, and slipped about half a cent shortly after the report was released.

For the period between July 12 and July 18, once again predicts “high” demand and offers the following outlook:

Hot high pressure will dominate most of the country into the weekend with highs of upper 80s to 100s, hottest from California, to Texas. However, a weak cool front lingers across the Ohio Valley and northeastern US, easing national demand slightly for today. Hot high pressure will return to dominate most of the country this weekend into early next week with widespread highs of 90s to 100s for strong demand. Stronger cooling will follow across the northern US late next week easing HIGH demand to MODERATE.

Total U.S. stockpiles rose week over week to 24.8% below last year’s level and are now 19.1% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.203 trillion cubic feet at the end of last week, around 519 billion cubic feet below the five-year average of 2.722 trillion cubic feet and 725 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.928 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 up about 0.3% to $82.83, in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.9%, at $5.11 in a 52-week range of $2.53 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.7% to $123.76. The 52-week range is $81.99 to $128.03.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.6%, at $22.76 in a 52-week range of $20.40 to $27.92.