The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 77 billion cubic feet for the week ending October 14. Analysts were expecting a storage addition of around 72 billion cubic feet. The five-year average for the week is an injection of around 84 billion cubic feet, and last year’s storage addition for the week totaled 87 billion cubic feet. Natural gas inventories rose by 79 billion cubic feet in the week ending October 7.
Natural gas futures for November delivery traded down about 1% in advance of the EIA’s report, at around $3.14 per million BTUs, and traded near $3.14 after the data release. Natural gas closed at $3.17 per million BTUs on Wednesday, after posting a five-day (and 52-week) high last Thursday of $3.37. The 52-week range for natural gas is $2.17 to $3.37. One year ago the price for a million BTUs was around $2.93.
Natural gas prices jumped last week on a new EIA projection for lower 2016 production and a colder winter ahead. Winter heating bills for the coming winter are projected to average $635, according to the EIA, up 22% compared with last winter but about average for the five prior winters.
In the near term, however, demand for natural gas is expected to be low to moderate for the next week with warmer temperatures in the West and cooler temperatures in the Northeast.
Stockpiles remain about 1.2% above their levels of a year ago and 5.1% above the five-year average.
The EIA reported that U.S. working stocks of natural gas totaled about 3.836 trillion cubic feet, around 185 billion cubic feet above the five-year average of 3.651 trillion cubic feet and 46 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.790 trillion cubic feet for the same period a year ago.
Here’s how share prices 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, traded down about 0.3%, at $86.89 in a 52-week range of $71.55 to $95.55.
Chesapeake Energy Corp. (NYSE: CHK) traded down about 4.5% to $6.43. The stock’s 52-week range is $1.50 to $8.49. The large drop was due more to the reaction to the company’s investor day presentation than to the inventory report.
EOG Resources Inc. (NYSE: EOG) traded down about 0.9% to $94.19. The 52-week range is $57.15 to $98.32.
Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1.2%, at $9.13 in a 52-week range of $5.78 to $11.36.
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