Natural Gas Inventory Rises Sharply, Weighs on Price

Natural gas futures for January delivery were trading up about 1.3% in advance of the EIA’s report, at around $4.14 per million BTUs, and slipped to around $4.10 immediately following the report. Natural gas futures have dropped by more than $0.30 per million BTUs since last week.

Stockpiles are about 5.7% below their levels of a year ago and about 6.2% below the five-year average. The U.S. natural gas injection season ended on October 31 with an actual total of 3.57 trillion cubic feet in storage. Last year’s injection season ended with 3.80 trillion cubic feet in inventory.

Temperatures dived across the northern tier of states late last week, and the cold temperatures have headed toward the heavily populated areas of the East Coast. That will have an impact on the storage report that comes out next week, but the moderate temperatures across much of the United States all of last week are responsible for the inventory build we see in this week’s report. This is the 30th consecutive week that natural gas inventories have risen more than the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled 3.61 trillion cubic feet, about 237 billion cubic feet below the five-year average of 3.83 trillion cubic feet and 220 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.83 trillion cubic feet for the same period a year ago. Natural gas inventories continue to rise, but remain below the bottom of the five-year range.

Here is how stocks 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, was up about 0.3%, at $94.95 in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up about 1%, at $22.93 in a 52-week range of $16.69 to $29.92.

EOG Resources Inc. (NYSE: EOG) was up about 1.5%, at $97.29. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was up about 0.8%, at $21.00 in a 52-week range of $17.31 to $27.89.

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