Natural Gas Price Holds Gain After Inventory Build

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 12 billion cubic feet for the week ending April 1. Analysts were expecting a storage addition of around 7 billion cubic feet. The five-year average for the week is a withdrawal of around 15 billion cubic feet, and last year’s storage addition for the week totaled 49 billion cubic feet. Natural gas inventories fell by 25 billion cubic feet in the prior week.

Natural gas futures for May delivery traded up about 2.7% in advance of the EIA’s report, at around $1.95 per million BTUs, and traded around $1.99 after the data release. Last Thursday, natural gas closed at $1.96 per million BTUs. On Monday the contract posted its high for the past five trading days at $2.00. The 52-week range for natural gas is $1.73 to $3.17. One year ago the price for a million BTUs was around $2.95.

The past week’s injection into storage lifted the country’s inventory to 2.480 trillion cubic feet, as of the end of the withdrawal season, which officially ended last Thursday, March 31. About the only good news for producers is that the inventory did not reach 2.5 trillion cubic feet as many traders and analysts had projected.

Gas prices are a bit higher this week thanks to a stalled weather system over the Great Lakes and northeastern United States. But temperatures remain mild over much of the West and are expected to warm up in the East next week. Demand for natural gas is expected to be moderate over the whole country into the middle of next week.
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Stockpiles are about 68.5% above their levels of a year ago and about 54% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.480 trillion cubic feet, around 874 billion cubic feet above the five-year average of 1.606 trillion cubic feet and 1.008 trillion cubic feet above last year’s total for the same period. Working gas in storage totaled 1.472 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers reacting to Thursday’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 1.1% at $82.37 in a 52-week range of $66.55 to $90.09.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.5% to $3.71. The stock’s 52-week trading range is $1.50 to $16.98.

EOG Resources Inc. (NYSE: EOG) traded down about 0.2% to $71.05. The 52-week range is $57.15 to $101.36.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 3.9%, at $6.71 in a 52-week range of $5.78 to $15.28.