Energy Economy

Natural Gas Price Steady Following Expected Massive Withdrawal

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 204 billion cubic feet for the week ending March 8.

Analysts polled by Reuters were expecting a storage withdrawal of around 210 billion cubic feet. The five-year average for the week is a withdrawal of 99 billion cubic feet, and last year’s withdrawal totaled 88 billion cubic feet. Natural gas inventories fell by 149 billion cubic feet in the week ending March 1.

Natural gas futures for April delivery traded up about two cents in advance of the EIA’s report, at around $2.83 per million BTUs, and traded essentially flat shortly after the announcement.

For the period between March 14 and March 20, expects “moderate” demand and offers the following outlook:

Temperatures will be warm across the S. Great Lakes and East the next couple days with highs of 50s to 70°F for Chicago today and NYC Friday. The southern US and Mid-Atlantic Coast will be spring-like with highs of 60s to 80s for very light demand. A strong storm continues across the Midwest/central US with rain and snow, but with only modest cooling. The West remains unsettled but warming. Colder weather systems will arrive East of the Rockies this weekend through next week with lows of 10s to 30s for strong demand.

Total U.S. stockpiles decreased week over week, falling to around 23.2% below last year’s level and to 32.4% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.186 trillion cubic feet at the end of last week, around 569 billion cubic feet below the five-year average of 1.755 trillion cubic feet and 359 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 1.545 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 up about 0.1%, at $80.79 in a 52-week range of $64.65 to $87.36.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 2.0%, at $3.08 in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded up about 0.8% to $89.30. The 52-week range is $82.04 to $133.53.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 0.5% to $25.00, in a 52-week range of $21.65 to $39.87.

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