Natural Gas Price Slips After Withdrawals Fall Short

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 237 billion cubic feet for the week ending February 1.

Analysts polled by Reuters were expecting a storage withdrawal of around 250 billion cubic feet. The five-year average for the week is a withdrawal of 150 billion cubic feet, and last year’s withdrawal totaled 116 billion cubic feet. Natural gas inventories fell by 173 billion cubic feet in the week ending January 24.

Natural gas futures for March delivery traded down nearly seven cents in advance of the EIA’s report, at around $2.60 per million BTUs, and it rose to about $2.62 afterward.

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

Cold air over the Plains will spread into Texas and across the Midwest today and Friday with a wintery mess of precipitation. Temperatures behind the core of the cold front will drop into the -10s to 20s, but also with teens to 30s into Texas and the South. It will be mild for one more day over the East with highs of 50s to 80s, although rapidly cooling Fri-Sat as the Midwest front arrives. The West will be unsettled and cool to cold. A mild break will return across the southern and eastern US early next week before another cold front arrives late in the week.

Total U.S. stockpiles¬†decreased week over week and fell to 6.4% below last year’s level and to 17.5% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.960 trillion cubic feet at the end of last week, around 415 billion cubic feet below the five-year average of 2.375 trillion cubic feet and 135 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.095 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 this report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 1.2%, at $74.38 in a 52-week range of $64.65 to $87.36.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 5.8%, at $2.45 in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down 4.4% to $91.92. The 52-week range is $82.04 to $133.53.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 3.5%, at $23.03 in a 52-week range of $21.56 to $39.87.