Natural Gas Price Up After Smaller-Than-Expected Inventory Addition

Energy

Published: October 22, 2015 10:55 am

Last Updated: April 28, 2020 2:24 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 81 billion cubic feet for the week ending October 16. Analysts expected a storage injection (increase) of around 87 billion cubic feet. The five-year average for the week is an increase of around 86 billion cubic feet, and last year’s addition for the week totaled 107 billion cubic feet.

Natural gas futures for November delivery traded up about 0.3% in advance of the EIA’s report, at around $2.41 per million BTUs, and rose by two cents after the data release to trade at about a penny below Wednesday’s closing price. Last Thursday, natural gas closed at $2.45 per million BTUs, and over the past five trading days natural gas futures peaked at around $2.50 on Tuesday. The 52-week high for natural gas futures is $4.00. One year ago the price for a million BTUs was around $3.86.

Temperatures across the United States are generally expected to be higher in the next several days, and that is lowering demand for natural gas to heat U.S. homes. The forecast calls for some significantly cooler weather late next week, which could help prop up the price of natural gas.

Stockpiles are nearly 13% 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 3.814 trillion cubic feet, around 163 billion cubic feet above the five-year average of 3.651 trillion cubic feet and 434 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.38 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 this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 1.5%, at $81.42 in a 52-week range of $66.55 to $97.20.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.1% to $7.86. The stock’s 52-week range is $6.01 to $24.43.

EOG Resources Inc. (NYSE: EOG) traded up about 1.6% to $85.14. The 52-week range is $68.15 to $103.04.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.2%, at $10.97 in a 52-week range of $11.89 to $23.73.

ALSO READ: Merrill Lynch Adds High-Yielding Energy Stock to US1 Best Ideas List

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