Natural Gas Price Slips From Multiyear High on Inventory Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles increased by 39 billion cubic feet for the week ending November 9.

Analysts were expecting a storage injection of around 33 billion cubic feet. The five-year average for the week is an injection of 19 billion cubic feet. Natural gas inventories rose by 65 billion cubic feet in the week ending November 2.

Natural gas futures for December delivery traded down about a 40 cents in advance of the EIA’s report, at around $4.32 per million BTUs, and slipped to $4.27 after the report was released.

For the period between November 15 and November 21, predicts “very high” demand and offers the following outlook:

Chilly conditions will cover much of the US again with lows of teens to 40s, keeping national demand stronger than normal. A weather system exiting the Southeast will track north up the East Coast with areas of rain and snow, although not as cold as recent systems since its coming from the South. Another strong cold blast is expected into the central, southern, and the eastern US Sat-Wed with lows again of 10-30s north and 30s to lower 40s across portions of Texas and the South/Southeast.

Total U.S. stockpiles increased week over week from 15.6% to 14.0% below last year’s level and also rose from 16.2% to 14.0% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.247 trillion cubic feet at the end of last week, around 601 billion cubic feet below the five-year average of 3.848 trillion cubic feet, and 528 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.775 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 0.8%, at $76.75 in a 52-week range of $72.16 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.8%, at $3.70 in a 52-week range of $2.53 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded up about 1.2% to $99.28. The 52-week range is $96.54 to $133.53.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 14.2% at $33.72 in a 52-week range of $20.40 to $39.87, a high posted Wednesday.

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