Natural Gas Price Dips Following Storage Report

Paul Ausick

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 62 billion cubic feet for the week ending June 17. Analysts were expecting a storage addition in a range of 55 billion to 66 billion cubic feet. The five-year average for the week is an injection of around 88 billion cubic feet, and last year’s storage addition for the week totaled 73 billion cubic feet. Natural gas inventories rose by 69 billion cubic feet in the week ending June 10.

Natural gas futures for July delivery traded down in advance of the EIA’s report, at $2.68 per million BTUs, and they traded near $2.65 after the data release. Last Thursday natural gas closed at $2.58 per million BTUs. The highest closing price for the past five trading days came Tuesday at $2.77 per million BTUs, after the contract had touched $2.79 earlier in the day. The 52-week range for natural gas is $1.94 to $3.17. One year ago the price for a million BTUs was around $3.16.

On Tuesday natural gas prices rose to their highest level since last September on forecasts of higher than normal temperatures across most of the United States. Large portions of the Southwest, including all of Texas, are expected to see temperatures in the 90s or higher, but population centers in the Great Lakes and Northeast U.S. are expected to be cooler. Overall demand for natural gas is expected to be moderate through the middle of next week and that has put downward pressure on prices for the past couple of days.

Stockpiles are about 25% above their levels of a year ago and 28% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.103 trillion cubic feet, around 678 billion cubic feet above the five-year average of 2.425 trillion cubic feet and 618 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.485 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers reacting to this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.5%, at $91.62 in a 52-week range of $66.55 to $92.06, and the high was posted early Thursday.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.1% to $4.56. The stock’s 52-week range is $1.50 to $11.90.

EOG Resources Inc. (NYSE: EOG) traded up about 1% to $84.40. The 52-week range is $57.15 to $89.52.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.3%, at $7.98 in a 52-week range of $5.78 to $14.17.