Natural Gas Price Adds to Gains Following Inventory Report

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 91 billion cubic feet for the week ending January 4.

Analysts polled by Reuters were expecting a storage withdrawal in a range of 50 billion to 115 billion cubic feet. The five-year average for the week is a withdrawal of 182 billion cubic feet, and last year’s withdrawal totaled 359 billion cubic feet, an all-time record driven by extremely cold weather along the east coast. Natural gas inventories fell by 20 billion cubic feet in the week ending December 28.

Natural gas futures for February delivery traded up about five cents in advance of the EIA’s report, at around $3.03 per million BTUs, and rose to around $3.06 after the report was released.

For the period between January 10 and January 16, NatGasWeather.com expects “moderate” demand and offers the following outlook:

A strong cold front will push across the Great Lakes and Northeast the next several days with lows reaching the 0s to 20s for strong demand. However, much of the rest of the country will be mostly mild with highs of 40s to 70s to counter. Weather systems with rain and snow will track into the West Coast with rain and snow, but with only slight cooling. This weekend into early next week will bring weather systems across the southern and eastern US with rain and snow, followed by warming mid next week.

Total U.S. stockpiles increased week over week from about 14.3% to 7.2% below last year’s level and also rose from about 17.2% to 15.1% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.614 trillion cubic feet at the end of last week, around 464 billion cubic feet below the five-year average of 3.078 trillion cubic feet and 204 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.818 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 1.2%, at $71.54 in a 52-week range of $64.65 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 2.2% to $2.70, in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down about 06% to $98.58. The 52-week range is $82.04 to $133.53.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.8%, at $25.10 in a 52-week range of $21.56 to $39.87.