Natural Gas Price Holds on In-Line Withdrawal Total

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 47 billion cubic feet for the week ending March 15.

Analysts were expecting a storage withdrawal of around 45 billion cubic feet. The five-year average for the week is a withdrawal of 56 billion cubic feet, and last year’s withdrawal totaled 87 billion cubic feet. Natural gas inventories fell by 204 billion cubic feet in the week ending March 8.

Natural gas futures for April delivery traded down about a penny in advance of the EIA’s report, at around $2.81 per million BTUs, and traded essentially flat shortly after the announcement.

For the period between March 21 and March 27, NatGasWeather.com expects “moderate” demand and offers the following outlook:

A weather system will track across the Northeast today and Friday with rain, snow, and chilly lows of 20s and 30s. The southern US will be mild to warm with highs of 60s to 80s, while mild across the western and central US with highs of 40s to 60s. After a brief break across the Midwest and Northeast late this weekend, another cold front is expected Tue-Wed with a swing back to strong demand as lows drop into the teens to 30s.

Total U.S. stockpiles decreased week over week, falling to around 21.6% below last year’s level and to 32.7% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.143 trillion cubic feet at the end of last week, around 556 billion cubic feet below the five-year average of 1.699 trillion cubic feet and 315 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 1.458 trillion cubic feet for the same period a year ago.

Next week is the last of the EIA’s official winter withdrawal season. Injection season begins in April and runs through October. Last year, however, injections of new supplies on natural gas into storage were delayed until May, and the United States started the 2018–2019 heating season with stockpiles at a 13-year low. At the end of March 2018, U.S. stockpiles totaled 1.36 trillion cubic feet. A total storage withdrawal of 100 billion cubic feet over the next two weeks would match that level.

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 $81.27 in a 52-week range of $64.65 to $87.36.
  • Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.2%, at $3.22 in a 52-week range of $1.71 to $5.60.
  • EOG Resources Inc. (NYSE: EOG) traded down about 0.9% to $95.01. The 52-week range is $82.04 to $133.53.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.9%, at $24.75 in a 52-week range of $21.65 to $39.87.

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