Natural Gas Price Moves Higher on Small Increase to Storage

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles increased by 35 billion cubic feet for the week ending July 27.

Analysts were expecting a storage injection of around 44 billion cubic feet. The five-year average for the week is an injection of 43 billion cubic feet and last year’s storage increase for the week totaled 18 billion cubic feet. Natural gas inventories rose by 24 billion cubic feet in the week ending July 20.

Natural gas futures for September delivery traded up about 0.9% in advance of the EIA’s report, at around $2.77 per million BTUs, and rose to $2.79 shortly after the report was released.

For the period between August 2 and August 8, NatGasWeather.com once again predicts “high” demand and offers the following outlook:

A cool front with showers and thunderstorms will stall across the east-central US another day with comfortable highs of 70s to lower 80s for lighter demand. Hot upper high pressure continues to dominate most of the West and South with highs of 90s to 110°F, hottest from California to Texas, although cooling this weekend over the Northwest & California. Hot high pressure will expand across the eastern half of the US Friday through Tuesday with 90s gaining ground for increasing national demand, then easing late next week as weather systems return.  Overall, demand will swing between MODERATE & HIGH.

In its July revision to the Short-Term Energy Outlook, the EIA has forecast that natural gas in working inventory will be 3.47 trillion cubic feet at the end of October, 10% below the five-year average and 9% lower than the year-ago level. The winter heating season runs from November through March, during which gas is typically withdrawn from storage, and the injection season runs from April through October.

Total U.S. stockpiles rose week over week to 23% below last year’s level and are now 19.7% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.308 trillion cubic feet at the end of last week, around 565 billion cubic feet below the five-year average of 2.873 trillion cubic feet and 688 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.996 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 down about 0.6%, at $79.93 in a 52-week range of $72.16 to $89.30.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.3%, at $4.44 in a 52-week range of $2.53 to $5.60.

EOG Resources Inc. (NYSE: EOG) traded down about 0.3% to $125.17. The 52-week range is $81.99 to $131.60.

The United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.2%, at $22.92 in a 52-week range of $20.40 to $27.92.