Natural Gas Inventory on Track to Top 3.9 Trillion Cubic Feet by Month's End

Energy

Published: October 8, 2015 10:50 am

Last Updated: April 28, 2020 2:19 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 95 billion cubic feet for the week ending October 2. Analysts were expecting a storage injection (increase) of around 98 billion cubic feet. The five-year average for the week is an increase of around 93 billion cubic feet, and last year’s addition for the week totaled 105 billion cubic feet.

Natural gas futures for November delivery traded up about 1.2% in advance of the EIA’s report, at around $2.50 per million BTUs, and rose about three cents after the data release. Natural gas posted a new 52-week low earlier this week at $2.40. Last Thursday natural gas closed at $2.43 per million BTUs, and over the past five trading days natural gas futures peaked Wednesday at around $2.53 before closing at $2.47. The 52-week high for natural gas futures is $4.00. One year ago the price for a million BTUs was around $3.89.

Temperatures are once again expected to be mild across most of the United States in the coming week, with a few locations in the Southeast reaching into the 90s. West of the Mississippi River, temperatures are expected to remain about 10 degrees or so above normal while temperatures in the Eastern half of the country could be a few degrees above normal as well.

While the natural gas stockpile is expected to top last year’s total, the building El Niño weather pattern is expected to produce a milder winter than last year and that will keep natural gas prices down as demand will not be as strong.

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Stockpiles are nearly 14% above their levels of a year ago and about 4.5% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.633 trillion cubic feet, around 155 billion cubic feet above the five-year average of 3.478 trillion cubic feet and 443 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.190 trillion cubic feet for the same period a year ago.

Here’s how share prices 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 0.6%, at $78.71 in a 52-week range of $66.55 to $97.20.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 3.4% to $8.86. The stock’s 52-week range is $6.01 to $24.43.

EOG Resources Inc. (NYSE: EOG) traded down about 0.2% to $83.58. The 52-week range is $68.15 to $103.04.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.4%, at $11.55 in a 52-week range of $11.11 to $23.73.

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