The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles increased by 63 billion cubic feet for the week ending August 31.

Analysts were expecting a storage injection of around 62 billion cubic feet. The five-year average for the week is an injection of 65 billion cubic feet, and last year’s storage increase for the week totaled 60 billion cubic feet. Natural gas inventories rose by 70 billion cubic feet in the week ending August 24.

Natural gas futures for October delivery traded down about a penny in advance of the EIA’s report, at around $2.78 per million BTUs, and it remained unchanged shortly after the report was released.

For the period between September 6 and September 12, NatGasWeather.com predicts “moderate” demand and offers the following outlook:

Hot conditions continue along the East Coast for one last day with highs near 90°F, although cooling Friday into the 70s to lower 80s as a cool front arrives after pushing across the Ohio Valley. It will be warm and wet over the Plains and east-central US as moisture and remnants from Gordon aids widespread showers and thunderstorms. Numerous weather systems will impact the country this weekend with highs in the 70s and 80s besides the far southern US and portions of the West for lighter demand. However, high pressure will re-strengthen next week with 80s to lower 90s gaining ground back.

Natural gas prices remain depressed due to too much production, even though inventory levels are below both last year’s total and the five-year average. The EIA forecasts daily production will rise from around 82 billion cubic feet per day currently to 84.3 billion by the end of next year.

Total U.S. stockpiles rose week over week to 20% below last year’s level and are now 18.7% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.568 trillion cubic feet at the end of last week, around 590 billion below the five-year average of 3.158 trillion and 643 billion below last year’s total for the same period. Working gas in storage totaled 3.211 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 Thursday’s report:

• Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.3%, at $81.14 in a 52-week range of $72.16 to $89.30.
• Chesapeake Energy Corp. (NYSE: CHK) traded down about 3.0%, at $4.18 in a 52-week range of $2.53 to $5.60.
• EOG Resources Inc. (NYSE: EOG) traded down about 1.0% to $116.71. The 52-week range is $86.08 to $131.60.

Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded down about 0.7%, at $22.77 in a 52-week range of $20.40 to $27.92.

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