Natural Gas Price Ticks Up on Smaller Inventory Increase

Energy

Published: August 6, 2015 11:35 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 32 billion cubic feet for the week ending July 31. Analysts polled by Bloomberg expected a storage injection (increase) of 40 billion cubic feet. The five-year average for the week is an increase of around 53 billion cubic feet.

Natural gas futures for September delivery traded down about six cents in advance of the EIA’s report, at around $2.75 per million BTUs, and popped higher to about $2.82 following release of the report. Last Thursday, natural gas closed at $2.78 per million BTUs and over the past five trading days, natural gas futures peaked Wednesday at around $2.86. The 52-week low for natural gas futures is $2.59. One year ago the price for a million BTUs was around $3.87.

Demand for natural gas is expected to decline as temperatures moderate across much of the more heavily populated regions of the United States. In Texas and the Southeastern states generally, high temperatures and humidity are expected to boost demand for air conditioning. By next week, higher temperatures are expected to move back over the northern portion of the country.

Stockpiles are about 23% above their levels of a year ago and 2% above the five-year average.

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The EIA reported that U.S. working stocks of natural gas totaled about 2.912 trillion cubic feet, around 64 billion cubic feet above the five-year average of 2.848 trillion cubic feet and 535 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.377 trillion cubic feet for the same period a year ago.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.6% to $77.64, in a 52-week range of $76.90 to $100.31.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 6.1% to $7.46. The stock’s 52-week range is $6.85 to $27.24.

EOG Resources Inc. (NYSE: EOG) traded up about 1.4% to $77.20. The 52-week range is $72.86 to $110.47.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.4%, at $13.52 in a 52-week range of $12.28 to $23.73.

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