Colder Weather Ups Natural Gas Demand, Weighs on Prices

Natural gas futures for January delivery were trading up about 1.8% in advance of the EIA’s report, at around $4.48 per million BTUs, and slipped a little to around $4.42 (up about 0.6% for the day)  immediately following the EIA report. Natural gas futures have slipped by about $0.05 per million BTUs since last week.

Stockpiles are about 9.2% below their levels of a year ago and about 10.4% below the five-year average.

Temperatures dropped sharply last week and demand for natural gas rose sharply as a result. Demand has been somewhat lower this week as temperatures moderate. The forecast calls for colder temperatures in the Midwest and Northeast through the weekend, while temperatures in the South are expected to rise to more normal levels. Next week’s temperatures are expected to be milder as well.

The EIA reported that U.S. working stocks of natural gas totaled 3.43 trillion cubic feet, about 400 billion cubic feet below the five-year average of 3.83 trillion cubic feet and 346 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.78 trillion cubic feet for the same period a year ago.

Here’s how stocks of the largest U.S. natural gas producers are reacting to today’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is up about 0.1% at $94.91 in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) is down about 1.2% at $23.42 in a 52-week range of $16.69 to $29.92.

EOG Resources Inc. (NYSE: EOG) is down about 1.3% at $95.43. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) is up about 0.2% at $22.62 in a 52-week range of $18.85 to $27.89.

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