Natural Gas Price Slips on 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 46 billion cubic feet for the week ending August 3.

Analysts were expecting a storage injection of around 45 billion cubic feet. The five-year average for the week is an injection of 53 billion cubic feet and last year’s storage increase for the week totaled 29 billion cubic feet. Natural gas inventories rose by 35 billion cubic feet in the week ending July 27.

Natural gas futures for September delivery traded up about a penny in advance of the EIA’s report, at around $2.96 per million BTUs, and slipped to $2.94 shortly after the report was released.

For the period between August 9 and August 15, NatGasWeather.com once again predicts “high” demand and offers the following outlook:

Strong upper high pressure continues across the East Coast where highs will again reach the 90s today. The West is back to very hot with highs of 90s to 100s, including the Northwest. Weather systems with showers and cooling will track through the Midwest and east-central US the next few days, including deep into Texas and the South with heavy rains into next week with highs of upper-70s and 80s, easing national demand from HIGH to MODERATE.

In its July revision to the Short-Term Energy Outlook, the EIA 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 The winter heating season runs from November through March, during which gas is typically withdrawn from storage, and the injection season runs from April through October.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 22.2% below last year’s level and are now 19.5% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.354 trillion cubic feet at the end of last week, around 572 billion cubic feet below the five-year average of 2.926 trillion cubic feet and 671 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.025 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 0.4% to $80.39, in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.5%, at $4.69 in a 52-week range of $2.53 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $123.03. The 52-week range is $81.99 to $131.60.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.5%, at $24.25 in a 52-week range of $20.40 to $27.92.