Energy Economy

Natural Gas Price Sags as Inventory Tops Year-Ago Total

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 163 billion cubic feet for the week ending January 18.

Analysts polled by Reuters were expecting a storage withdrawal of around 154 billion cubic feet. The five-year average for the week is a withdrawal of 185 billion cubic feet and last year’s withdrawal totaled 273 billion cubic feet. Natural gas inventories fell by 81 billion cubic feet in the week ending January 11.

Natural gas futures for March delivery traded up about nine cents in advance of the EIA’s report, at around $3.01 per million BTUs, and ticked down to around $3.00 after the report was released.

For the period between January 24 and January 30, expects “high” demand and offers the following outlook:

A mild break will last one more day across the East with highs warming into the 40s to 60s. However, another polar blast currently advancing through the Midwest will sweep through the East Fri-Sat with lows dropping back into the -10s to 20s for very strong demand. A brief break will follow to start next week ahead of the strongest polar blast in the series Tuesday through Friday. The West will see a mix of mild, cool, and cold.

Total U.S. stockpiles increased week over week from about 2.0% to 1.4% above last year’s level and also rose from about 14.8% to 11.4% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.370 trillion cubic feet at the end of last week, around 305 billion cubic feet below the five-year average of 2.675 trillion cubic feet and 33  billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.337 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 less than 0.1%, at $71.25 in a 52-week range of $64.65 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.2%, at $2.69 in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down 0.1% to $96.50. The 52-week range is $82.04 to $133.53.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.9%, at $26.54 in a 52-week range of $21.56 to $39.87.

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