Energy Economy

Natural Gas Price Dips After Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles increased by 58 billion cubic feet for the week ending October 19.

Analysts were expecting a storage injection of around 39 billion to 65 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 63 billion cubic feet. Natural gas inventories rose by 81 billion cubic feet in the week ending October 12.

Natural gas futures for November delivery traded up about three cents in advance of the EIA’s report, at around $3.20 per million BTUs, and slipped to $3.18 after the report was released.

For the period between October 25 and October 31, predicts “high” demand and offers the following outlook:

Cool conditions will linger across Midwest to Northeast the next few days with highs of 40s and 50s, while another reinforcing cold shot to follow this weekend into early next week. The West will be warm with highs of 60s to 80s due to high pressure. A weather system will track across the Southeast the next couple days and then track north up the Atlantic Coast while strengthening, bringing rain and windy conditions. Overall, demand will be near to slightly stronger than normal through the middle of next week, then dropping below.

Total U.S. stockpiles increased slightly week over week to 16.4% below last year’s level and dipped slightly to 16.8% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.095 trillion cubic feet at the end of last week, around 624 billion cubic feet below the five-year average of 3.719 trillion cubic feet and 606 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.701 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 0.6%, at $78.10 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.7%, at $3.99 in a 52-week range of $2.53 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded up about 1.3% to $107.55. The 52-week range is $95.74 to $133.53.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.7%, at $26.20 in a 52-week range of $20.40 to $27.65.

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