Energy

Natural Gas Inventory Rises Ahead of Start to Heating Season

Blue flames of a gas stove
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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 87 billion cubic feet for the week ending October 24, compared with an expected increase of between 83 billion and 87 billion cubic feet anticipated by analysts. The five-year average injection for the week is 59 billion cubic feet.

Natural gas futures were trading up about 0.7% in advance of the EIA’s report, at around $3.90 per million BTUs, and remained about flat immediately following the report. Natural gas futures have risen by about $0.15 per million BTUs since last week.

Stockpiles are about 7.8% below their levels of a year ago and about 8.2% below the five-year average. The U.S. natural gas injection season ends this week, and the EIA earlier this month lowered its end-of-October total inventory estimate from 3.55 trillion cubic feet to 3.53 trillion cubic feet. The actual total may exceed both of those estimates. Last year’s injection season ended with 3.8 trillion cubic feet in inventory.

The weather for the past week was seasonably mild and that boosted the injection gain. This is the last week of 2014 injection season, and beginning in November we should begin to see drawdowns as the weather begins turning colder. For the EIA’s latest reporting period, the weather had been warmer than expected in the western half of the country, but cooler east of the Mississippi River.

The EIA reported that U.S. working stocks of natural gas totaled 3.48 trillion cubic feet, about 310 billion cubic feet below the five-year average of 3.79 trillion cubic feet. Working gas in storage totaled 3.77 trillion cubic feet for the same period a year ago. Natural gas inventories continue to rise, but remain below the bottom of the five-year range.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was down about 0.9%, at $93.74 in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was down about 1.3%, at $21.32 in a 52-week range of $16.69 to $29.92.

EOG Resources Inc. (NYSE: EOG) was down about 0.8% to $92.36. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was up about 0.5%, at $19.94 in a 52-week range of $16.91 to $27.89.

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