Natural Gas Price Ticks Lower on Inventory Build

Energy

Published: June 18, 2015 10:50 am

Last Updated: April 28, 2020 2:24 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 89 billion cubic feet for the week ending June 12. Analysts polled by The Wall Street Journal expected a storage injection (increase) of 93 billion cubic feet. The five-year average for the week is an increase of around 87 billion cubic feet.

Natural gas futures for July delivery traded down about 1% in advance of the EIA’s report, at around $2.84 per million BTUs, and ticked down to $2.83 following release of the report. Last Thursday, natural gas closed at $2.82 per million BTUs, and natural gas futures peaked at around $2.96 earlier this week. The 52-week low for natural gas futures is $2.54. One year ago, the price for a million BTUs was around $4.27.

By Wednesday, natural gas prices had risen 6% from a weekly low around $2.81 per million BTUs to a high of about $2.99. The increase came as updated weather forecasting models suggested warmer-than-normal temperatures in the eastern part of the country through June 24, lifting demand from power generators that supply the electricity to run air conditioning. Very warm to hot temperatures are expected across most of the country next week, with temperatures across the south reaching triple digits and reaching the 90s in the northern part of the United States.

Stockpiles are about 43% above their levels of a year ago and nearly 2% above the five-year average.

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The EIA reported that U.S. working stocks of natural gas totaled about 2.433 trillion cubic feet, around 46 billion cubic feet above the five-year average of 2.387 trillion cubic feet, as well as 730 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.703 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, traded up about 0.9% to $85.50, in a 52-week range of $82.68 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.5%, at $12.03 in a 52-week range of $11.96 to $29.92. The low was set earlier today.

EOG Resources Inc. (NYSE: EOG) traded up about 0.5% to $89.426. The 52-week range is $81.07 to $118.89.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1.15%, at $13.70 in a 52-week range of $12.28 to $25.99.

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