Natural Gas Price Bounces Around Following Inventory Addition

Energy

Published: November 19, 2015 11:10 am

Last Updated: January 13, 2020 4:59 pm

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 15 billion cubic feet for the week ending November 13. Analysts were expecting a storage increase of around 23 billion cubic feet. The five-year average for the week is an increase of around 30 billion cubic feet, and last year’s addition for the week totaled 40 billion cubic feet.

Natural gas futures for January delivery traded down about 0.8% in advance of the EIA’s report, at around $2.47 per million BTUs, and climbed a bit after the data release to trade at $2.48, down two cents compared with Wednesday’s closing price. Last Thursday natural gas closed at $2.26 per million BTUs, and over the past five trading days, natural gas futures peaked at around $2.60 on Friday. The 52-week range for natural gas is $2.36 to $4.18. One year ago the price for a million BTUs was around $4.16.

Demand for natural gas is expected to rise into the weekend as a strong weather system moves across the northern and eastern parts of the Lower 48. Behind the storms, cooler weather is expected early next week, dropping temperatures below freezing across the Great Lakes states and into the northeast, keeping demand at moderate or better levels.

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Stockpiles are more than 11% above their levels of a year ago and about 5.5% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 4 trillion cubic feet, around 207 billion cubic feet above the five-year average of 3.793 trillion cubic feet and 404 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.596 trillion cubic feet for the same period a year ago.

Here is how share prices of the largest U.S. natural gas producers react to this latest report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.3%, at $80.51 in a 52-week range of $66.55 to $97.20.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 6.9% to $5.58. The stock’s 52-week range is $5.28 to $24.43, and the low was posted earlier Thursday.

EOG Resources Inc. (NYSE: EOG) traded down about 2.1% to $83.25. The 52-week range is $68.15 to $103.04.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 0.4% at $9.76 in a 52-week range of $9.35 to $23.73.

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