Energy

Natural Gas Price Slips as Warmer Winter Cuts Demand

Blue flames of gas stove
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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 216 billion cubic feet for the week ending January 16, compared with an expected decrease of around 236 billion cubic feet anticipated by analysts. The five-year average draw is 176 billion cubic feet, and during the same period last year the draw was 133 billion cubic feet.

Natural gas futures for February delivery traded down more than 2% in advance of the EIA’s report, at around $2.90 per million BTUs, and fell more than five cents immediately following the report. Natural gas futures have tumbled from a high of around $3.35 per million BTUs since last week. The 52-week low for natural gas futures is $2.78.

The weather forecast for the rest of this week and into next week calls for more winter-like temperatures across most of the country, with some colder air at times pushing into the southeastern United States. Temperatures west of the Rockies are expected to be warmer than normal. All this adds up to more moderate demand for natural gas this week, roughly the same as demand was a week ago.

Stockpiles are about 8.2% above their levels of a year ago and about 5.5% below the five-year average. The relatively milder weather so far in the heating season has curtailed stockpile drawdowns, compared with last year’s much colder weather.

The EIA reported that U.S. working stocks of natural gas totaled 2.64 trillion cubic feet, about 153 billion cubic feet below the five-year average of 2.79 trillion cubic feet and 199 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.44 trillion cubic feet for the same period a year ago.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was down fractionally Thursday morning, at $91.86 in a 52-week range of $86.19 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was down about 2.6%, at $19.35 in a 52-week range of $16.41 to $29.92.

EOG Resources Inc. (NYSE: EOG) was down about 0.5% to $90.04. The 52-week range is $80.63 to $118.89.

Also, the United States Natural Gas ETF (NYSEMKT: UNG) was down about 4.4%, at $14.37 in a 52-week range of $14.09 to $27.89.

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