Natural Gas Price Rises as Weather Heats Up

Energy

Published: July 23, 2015 11:10 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 61 billion cubic feet for the week ending July 17. Analysts polled by The Wall Street Journal expected a storage injection (increase) of 70 billion cubic feet. The five-year average for the week is an increase of around 53 billion cubic feet.

Natural gas futures for September delivery traded up about 3 cents in advance of the EIA’s report, at around $2.91 per million BTUs, and rose to about $2.96 following release of the report. Last Thursday, natural gas closed at $2.85 per million BTUs, and over the past five trading days, natural gas futures peaked at Thursday’s $2.96. The 52-week low for natural gas futures is $2.59. One year ago, the price for a million BTUs was around $3.88.

The EIA last week reclassified some working gas as base gas, and that decreased working gas stockpiles by about 7 billion cubic feet.

Demand for natural gas is expected to rise as hot weather spreads across the Midwest, the Plains states and the southeastern United States. The hot weather is expected to last through most of next week as well.

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Stockpiles are about 28% above their levels of a year ago and 2.9% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.828 trillion cubic feet, around 81 billion cubic feet above the five-year average of 2.747 trillion cubic feet and 622 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.206 trillion cubic feet for the same period a year ago.

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, traded down about 0.2%, at $81.61 in a 52-week range of $81.43 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 2.5% to $8.75, a new 52-week low. The stock’s 52-week high is $27.58.

EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $76.25. The 52-week range is $75.76 to $116.93.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1%, at $13.77 in a 52-week range of $12.28 to $23.73.

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