Natural Gas Price Bounces Higher After Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 39 billion cubic feet for the week ending July 1. Analysts were expecting a storage addition in a range of 36 billion to 46 billion cubic feet. The five-year average for the week is an injection of around 77 billion cubic feet, and last year’s storage addition for the week totaled 87 billion cubic feet. Natural gas inventories rose by 37 billion cubic feet in the week ending June 17.

Natural gas futures for August delivery traded up about 0.7% in advance of the EIA’s report, at around $2.80 per million BTUs, and they traded near $2.83 after the data release. Natural gas closed at $2.79 per million BTUs on Wednesday, after dropping from $2.99 on Tuesday. The 52-week range for natural gas is $1.99 to $3.18. One year ago the price for a million BTUs was around $3.04.

Cooler weather both earlier this week and forecast into next week east of the Mississippi has weighed heavily on natural gas prices. Tuesday’s price drop was the largest single-day decline in eight months. Warmer weather continues to be forecast for the West and Southwest, raising demand for natural gas across the country to moderate to high levels.

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Stockpiles are about 20% above their levels of a year ago and more than 23% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.179 trillion cubic feet, around 599 billion cubic feet above the five-year average of 2.58 trillion cubic feet and 538 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.641 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 this report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.5%, at $93.65 in a 52-week range of $66.55 to $94.49, and the high was posted Thursday morning.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 4.4% to $4.54. The stock’s 52-week range is $1.50 to $11.88.

EOG Resources Inc. (NYSE: EOG) traded up about 1% to $83.56. The 52-week range is $57.15 to $89.52.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 0.8%, at $8.34 in a 52-week range of $5.78 to $14.17.

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