Natural Gas Price Rises on Another Big Storage Drawdown

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 177 billion cubic feet for the week ending February 15.

Analysts polled by Reuters were expecting a storage withdrawal of around 170 billion cubic feet. The five-year average for the week is a withdrawal of 148 billion cubic feet, and last year’s withdrawal totaled 134 billion cubic feet. Natural gas inventories fell by 78 billion cubic feet in the week ending February 8.

Natural gas futures for March delivery traded up nearly four cents in advance of the EIA’s report, at around $2.67 per million BTUs, and popped to around $2.69 after the report was released.

For the period between February 14 and February 20, NatGasWeather.com expects “moderate” demand and offers the following outlook:

Conditions will warm across the Ohio Valley, and Northeast the next few days with highs into the 40s and 50s but also with rain and snow along a frontal boundary between cold central US air and warming Eastern US air. The West will be cool to cold as weather systems track through. Mild high pressure will dominate the South & Mid-Atlantic Coast Thu-Sun with highs of 60s to 80s, warmest over the Southeast. Stronger cold shots will sweep across the northern and central US late next week.

Total U.S. stockpiles decreased week over week, falling to around 4.1% 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 1.705 trillion cubic feet at the end of last week, around 362 billion cubic feet below the five-year average of 2.067 trillion cubic feet and 73 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 1.778 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers are reacting to today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.8%, at $77.92 in a 52-week range of $64.65 to $87.36.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 4.4%, at $2.63 in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down about 2.9% to $95.94. The 52-week range is $82.04 to $133.53.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.8% at $24.00 in a 52-week range of $21.65 to $39.87.

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