Natural Gas Price Steady Following Expected Storage Increase

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles increased by 90 billion cubic feet for the week ending October 5.

Analysts were expecting a storage injection of around 90 billion cubic feet. The five-year average for the week is an injection of 90 billion cubic feet, and last year’s storage increase for the week totaled 81 billion cubic feet. Natural gas inventories rose by 98 billion cubic feet in the week ending September 28.

Natural gas futures for November delivery traded down about nine cents in advance of the EIA’s report, at around $3.19 per million BTUs, and remained at about that level after the report was released.

For the period between October 11 and October 17, predicts “high” demand and offers the following outlook:

A weather system with rain and snow will track across the Great Lakes and east-central US today, while also steering Hurricane Michael over the Mid-Atlantic Coast and back out to sea. Lows behind the cool front will be in the 20s to 40s. The southern US will be mild to warm with mostly 60s to 80s. Additional weather systems and cool shots will push into the central and northern US late this weekend into next week.

Total U.S. stockpiles decreased week over week to 17.5% below last year’s level and also fell slightly to 17% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.956 trillion cubic feet at the end of last week, around 607 billion below the five-year average of 3.563 trillion cubic feet and 627 billion below last year’s total for the same period. Working gas in storage totaled 3.583 trillion cubic feet for the same period a year ago.

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

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 1.3%, at $83.43 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 4.1%, at $4.42 in a 52-week range of $2.53 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down about 1.8% to $124.14. The 52-week range is $95.36 to $133.53.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 2.6%, at $26.29 in a 52-week range of $20.40 to $27.65.

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