Natural Gas Inventory Drop Sends Prices Higher

Energy

Published: November 20, 2014 11:00 am

Last Updated: April 28, 2020 2:19 am

The U.S. Energy Information Administration (EIA) reported Friday morning that U.S. natural gas stocks decreased by 17 billion cubic feet for the week ending November 14. That compared with an expected increase of 38 billion cubic feet anticipated by analysts. The five-year average injection for the week is around 16 billion cubic feet.

Natural gas futures for January delivery were trading up about 1% in advance of the EIA’s report, at around $4.56 per million BTUs, and jumped to around $4.63 (up about 2.5%) immediately following the report. Natural gas futures have risen by more than $0.50 per million BTUs since last week.

Stockpiles are about 5.3% below their levels of a year ago and about 6.4% below the five-year average.

Temperatures dropped sharply during the past week, and demand for natural gas has risen sharply as a result. Demand is expected to increase further as more cold air drops into the northern tier and moves east. Temperatures in the south are forecast to moderate somewhat. Thanksgiving week should see colder temperatures, but not as cold as the recent bitter weather.

The EIA reported that U.S. working stocks of natural gas totaled 3.59 trillion cubic feet, about 244 billion cubic feet below the five-year average of 3.84 trillion cubic feet and 201 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.61 trillion cubic feet for the same period a year ago.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was up about 0.3%, at $95.87 in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up about 3.9%, at $23.94 in a 52-week range of $16.69 to $29.92.

EOG Resources Inc. (NYSE: EOG) was up about 1.8% to $100.11. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was up about 0.4%, at $23.24 in a 52-week range of $18.13 to $27.89.

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