Natural Gas Price Rises, but Faces Changing Weather Outlook

Energy

Published: January 8, 2015 11:05 am

Last Updated: April 28, 2020 2:22 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 131 billion cubic feet for the week ending January 2. That compared with an expected decrease of around 121 billion cubic feet anticipated by analysts. The five-year average draw is 145 billion cubic feet, and during the same period last year the draw was 148 billion cubic feet.

Natural gas futures for February delivery traded up about 0.3% in advance of the EIA’s report, at around $2.88 per million BTUs, and jumped to around $2.91 (up about 1.4% for the day) immediately following the report. Natural gas futures have slipped from a high of around $3.19 per million BTUs since last week. Futures dropped to a 52-week low of $2.81 on Tuesday.

Cold weather across the country is expected to lift over the weekend, but the current week has been relatively mild in the high population areas in the Northeast. Demand was high last week as cold weather hit the most of the country west of the Mississippi River, but demand is expected to moderate somewhat over the next couple of weeks.

Stockpiles are about 8.8% above their levels of a year ago and about 2.1% below the five-year average. The relatively mild weather so far in the heating season has curtailed stockpile drawdowns.

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The EIA reported that U.S. working stocks of natural gas totaled 3.09 trillion cubic feet, about 67 billion cubic feet below the five-year average of 3.16 trillion cubic feet and 250 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.84 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 report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was up about 1.2%, at $91.79 in a 52-week range of $86.19 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up about 1.4%, at $18.19 in a 52-week range of $16.41 to $29.92.

EOG Resources Inc. (NYSE: EOG) was up about 2.8% to $86.01. The 52-week range is $80.63 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was up about 1%, at $14.72 in a 52-week range of $14.31 to $27.89.

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