Natural Gas Price Rises as Weather Is Expected to Turn Colder

Blue flames of gas stove
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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 51 billion cubic feet for the week ending December 5, compared with an expected decrease of between 40 billion and 50 billion cubic feet anticipated by analysts.

Natural gas futures for January delivery were trading down about 0.9% in advance of the EIA’s report, at around $3.65 per million BTUs, and jumped to around $3.75 (up more than 1% for the day) immediately following the report. Natural gas futures had slipped by more than $0.10 per million BTUs since last week.

Moderate winter temperatures in the past week or so are expected to give way to colder temperatures beginning next week. For most of the United States in the week ending Friday, temperatures will be warmer than a year ago and will lessen the demand on natural gas. Temperatures are forecast to fall across the Great Lakes and Northeast next week, raising demand and prices for natural gas.

Stockpiles are about 5.2% below their levels of a year ago and about 9.5% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled 3.36 trillion cubic feet, about 351 billion cubic feet below the five-year average of 3.71 trillion cubic feet and 186 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.55 trillion cubic feet for the same period a year ago.

Here is how stocks of the largest U.S. natural gas producers reacting to the latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was up about 2.7% to $91.22, in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up about 2.33%, at $17.54 in a 52-week range of $16.69 to $29.92.

EOG Resources Inc. (NYSE: EOG) is up about 3% to $89.06. The 52-week range is $78.12 to $118.89.

Also, the United States Natural Gas ETF (NYSEMKT: UNG) was up about 2%, at $19.18 in a 52-week range of $18.27 to $27.89.

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