Energy

Natural Gas Price Rises Following Large Inventory Withdrawal

Paul Ausick

Published: January 28, 2016 11:35 am

Last Updated: January 13, 2020 2:26 pm

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 211 billion cubic feet for the week ending January 22. Analysts were expecting a storage withdrawal of around 205 billion cubic feet. The five-year average for the week is a withdrawal of around 170 billion cubic feet, and last year’s withdrawal for the week totaled 115 billion cubic feet. The withdrawal from storage totaled 178 billion cubic feet in the previous week.

Natural gas futures for March delivery traded down about 2.4% in advance of the EIA’s report, at around $2.11 per million BTUs, and traded around $2.13 after the data release. Last Thursday, natural gas closed at $2.14 per million BTUs, and over the past five trading days the high for natural gas futures was posted Tuesday at $2.22 per million BTUs. The 52-week range for natural gas is $1.91 to $3.41. One year ago, the price for a million BTUs was around $3.30.

A weather system is expected to move through the Great Lakes states and into the Northeast later this week, sending temperatures plunging briefly before warming through the middle of next week. A major storm is expected over the Midwest next week, and in the West weather will be mild until the weekend, when colder, wetter weather moves in.

Stockpiles are about 20.7% above their levels of a year ago and about 16.3% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.086 trillion cubic feet, around 432 billion cubic feet above the five-year average of 2.654 trillion cubic feet and 530 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.556 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 0.6%, at $75.72 in a 52-week range of $66.55 to $93.45.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.6% to $3.30. The stock’s 52-week range is $2.69 to $21.49.

EOG Resources Inc. (NYSE: EOG) traded up about 1.1% to $66.73. The 52-week range is $57.15 to $101.36.

Furthermore, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.6%, at $7.83 in a 52-week range of $6.91 to $15.28.