Natural Gas Price Slips as Storage Injections Rise

Energy

Published: May 7, 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 increased by 76 billion cubic feet for the week ending May 1. Analysts expected a storage injection (increase) of 73 billion cubic feet. The five-year average for the week is an increase of around 68 billion cubic feet.

Natural gas futures for June delivery traded up about 1% in advance of the EIA’s report, at around $2.80 per million BTUs, and slipped to around $2.76 (down about 0.1% for the day) following release of the report. Last Thursday, natural gas closed at $2.75 per million BTUs, and natural gas futures have increased by about 2.5% over the past five trading days. The 52-week low for natural gas futures is $2.48. One year ago the price for a million BTUs was around $4.20.

Spring weather is bringing warmer temperatures to the northern and eastern United States. Showers and thunderstorms are also spreading across parts of the country, but temperatures are not expected to slide. Demand for natural gas for heating is expected to be low this week and likely to be very low next week.

The EIA said last week that in order to reach the five-year average in storage at the end of October, average weekly injections into storage need to be around 78 billion cubic feet.

Stockpiles are about 71.1% above their levels of a year ago and about 3.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.79 trillion cubic feet, around 67 billion cubic feet below the five-year average of 1.85 trillion cubic feet and 742 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.04 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 this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 1.2% to $87.19, in a 52-week range of $82.68 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 2.8%, at $14.31 in a 52-week range of $13.38 to $29.92. The company reported a first-quarter net loss on Wednesday.

EOG Resources Inc. (NYSE: EOG) traded down about 2% to $93.20. The 52-week range is $81.07 to $118.89.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.4%, at $13.61 in a 52-week range of $12.28 to $26.42.

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