Natural Gas Price Tumbles on Huge Inventory Growth

Energy

Published: June 5, 2014 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 119 billion cubic feet for the week ending May 30. That compared with an expected increase of around 114 billion to 118 billion cubic feet anticipated by analysts.

Natural gas futures prices were trading up about 0.4% in advance of the EIA’s report, at around $4.66 per million BTUs, and slipped about 1% to around $4.60 immediately following the report.

For the same week a year ago, stockpiles rose by 108 billion cubic feet, and the five-year average for the week is an increase of 93 billion cubic feet. Stockpiles are about 33% below their levels of a year ago and more than 37% below the five-year average.

Natural gas demand should remain low this week as only the southern states will see some very warm weather. Next week’s forecast calls for warmer temperatures across a larger portion of the United States, driving up demand for cooling.

The EIA reported that U.S. working stocks of natural gas totaled 1.5 trillion cubic feet, about 896 billion cubic feet below the five-year average of 2.4 trillion cubic feet. Working gas in storage totaled 2.23 trillion cubic feet for the same period a year ago. Natural gas inventories are rising again, but they remain well below the bottom of the five-year range.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was up about 0.2%, at $100.19 in a 52-week range of $84.79 to $103.45.

Chesapeake Energy Corp. (NYSE: CHK) was up about 1.2%, at $29.63 in a 52-week range of $19.32 to $30.48.

EOG Resources Inc. (NYSE: EOG) was up fractionally to $106.41. The 52-week range is $62.27 to $106.83.

ALSO READ: Could U.S. Energy Exports Lower Gas Prices and Create 400,000 Jobs per Year?

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