Energy Economy

Natural Gas Price Trades Sideways After Expected Withdrawal

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 166 billion cubic feet for the week ending February 22.

Analysts polled by Reuters were expecting a storage withdrawal of between 160 and 179 billion cubic feet. The five-year average for the week is a withdrawal of 104 billion cubic feet and last year’s withdrawal totaled 85 billion cubic feet. Natural gas inventories fell by 177 billion cubic feet in the week ending February 15.

Natural gas futures for April delivery traded up about a penny in advance of the EIA’s report, at around $2.82 per million BTUs and dipped to around $2.80 within an hour.

For the period between February 28 and March 6, expects “moderate” demand and offers the following outlook:

Mostly mild conditions for the Ohio Valley and East the next few days with highs reaching the 40s and 50s. It will remain warm across the southern US & Mid-Atlantic Coast into the weekend with highs of 60s to 80s, then cooling this weekend into next week. The West will be cool and stormy as weather systems bring rain and snow. Finally, frigid cold across the Plains will spread south and east this weekend through next week w/lows of -20s to 20s, 20s and 30s into Texas portions of the southern US for very strong national demand.

Total U.S. stockpiles decreased week over week, falling to around 9.1% below last year’s level and to 21.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.539 trillion cubic feet at the end of last week, around 424 billion cubic feet below the five-year average of 1.963 trillion cubic feet and 154 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 1.693 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 0.5% at $79.09 in a 52-week range of $64.65 to $87.36.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 1% at $2.93 in a 52-week range of $1.71 to $5.60.

EOG Resources Inc. (NYSE: EOG) traded down about 1% at $94.11. The 52-week range is $82.04 to $133.53.

The United States Natural Gas ETF (NYSEArca: UNG) traded up about 0.2% at $24.79 in a 52-week range of $21.65 to $39.87.

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