Natural Gas Price Tumbles on Inventory Addition of 100 Billion Cubic Feet

Energy

Published: October 15, 2015 11:15 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 100 billion cubic feet for the week ending October 9. Analysts were expecting a storage injection (increase) of between 91 billion and 95 billion cubic feet. The five-year average for the week is an increase of around 83 billion cubic feet, and last year’s addition for the week totaled 94 billion cubic feet.

Natural gas futures for November delivery traded up about 2% in advance of the EIA’s report, at around $2.57 per million BTUs, and fell six cents after the data release to trade at about a penny below Wednesday’s closing price. Last Thursday natural gas closed at $2.50 per million BTUs and over the past five trading days natural gas futures peaked earlier Thursday at around $2.58. 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 have dropped across much of the country and that trend is expected to continue into next week, at least in some of the most heavily populated regions. A storm tracking across the Midwest is heading for the mid-Atlantic and Northeast states and is expected to raise demand for heating. Demand for natural gas figures to rise from low to moderate through next week.

Stockpiles are nearly 14% above their levels of a year ago and about 4.7% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.733 trillion cubic feet, around 168 billion cubic feet above the five-year average of 3.565 trillion cubic feet and 447 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.286 trillion cubic feet for the same period a year ago.

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Here is how share prices 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 up about 0.3%, at $80.39 in a 52-week range of $66.55 to $97.20.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.7% to $8.16. The stock’s 52-week range is $6.01 to $24.43.

EOG Resources Inc. (NYSE: EOG) traded up less than 0.1% to $85.84. The 52-week range is $68.15 to $103.04.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1%, at $11.53 in a 52-week range of $11.11 to $23.73.

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