Natural Gas Price Remains Low as Warm Weather Cools Demand

Energy

Published: December 3, 2015 11:10 am

Last Updated: January 13, 2020 4:31 pm

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 53 billion cubic feet for the week ending November 27. Analysts were expecting a storage withdrawal of around 50 billion cubic feet. The five-year average for the week is a withdrawal of around 11 billion cubic feet, and last year’s withdrawal for the week totaled 22 billion cubic feet.

Natural gas futures for January delivery traded about flat in advance of the EIA’s report, at around $2.16 per million BTUs, and traded at $2.18 after the data release, compared with Wednesday’s closing price of $2.17. Last Wednesday, natural gas closed at $2.30 per million BTUs, and over the past five trading days of natural gas futures that represented the peak price. The 52-week range for natural gas is $2.15 to $4.02, and the low was set Thursday morning. One year ago the price for a million BTUs was around $3.92.

Natural gas prices have been tracking the nation’s weather, and so far cold winter weather has failed to show up. Some cooler weather around the Great Lakes and into the east will arrive later this week, but next week’s forecast calls for warmer than normal temperatures over a large part of the country. Demand for natural gas is expected to be no more than moderate for the next week.

Stockpiles are about 16% above their levels of a year ago and about 6.7% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.956 trillion cubic feet, around 247 billion cubic feet above the five-year average of 3.709 trillion cubic feet and 543 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.413 trillion cubic feet for the same period a year ago.

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Here is how share prices 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 down about 0.9% at $78.79, in a 52-week range of $66.55 to $95.18.

Chesapeake Energy Corp. (NYSE: CHK) down about 7.9% to $5.09, after posting a new 52-week low of $4.96. The stock’s 52-week high is $21.49.

EOG Resources Inc. (NYSE: EOG) traded up about 0.1% to $81.01. The 52-week range is $68.15 to $101.36.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.6%, at $8.43 in a 52-week range of $8.34 to $19.56. The low was posted earlier in the morning.

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