The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 71 billion cubic feet for the week ending May 20. Analysts were expecting a storage addition of around 67 billion cubic feet. The five-year average for the week is an injection of around 97 billion cubic feet, and last year’s storage addition for the week totaled 112 billion cubic feet. Natural gas inventories rose by 73 billion cubic feet in the week ending May 13.
Natural gas futures for July delivery traded down about 0.8% in advance of the EIA’s report, at around $2.17 per million BTUs, and traded down nearly three cents after the data release. Last Thursday, natural gas closed at $2.20 per million BTUs. The highest closing price for the past five trading days came last Friday at $2.21 per million BTUs. The 52-week range for natural gas is $1.94 to $3.19. One year ago the price for a million BTUs was around $3.06.
The forecast through May 31 calls for stormy weather in the western and central United States, with temperatures warming over the Great Lakes and northeast. In the south, temperatures in the 80s and 90s are expected. Overall, the eastern United States is expected to be warmer than the west, but temperatures are not expected to rise to unseasonal highs. Demand for natural gas is once again expected to be low through the middle of next week.
The significant drop in new additions to natural gas storage is due more to restrictions on production than any other factor. By one estimate, total U.S. storage capacity of around 4.3 trillion cubic feet could be reached by the time the injection season ends in October.
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Stockpiles are about 37% above their levels of a year ago and more than 37% above the five-year average.
The EIA reported that U.S. working stocks of natural gas totaled about 2.825 trillion cubic feet, around 769 billion cubic feet above the five-year average of 2.056 trillion cubic feet and 756 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.069 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 this latest report:
Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.7%, at $89.59 in a 52-week range of $66.55 to $90.46.
Chesapeake Energy Corp. (NYSE: CHK) traded up about 0.8% to $4.39. The stock’s 52-week range is $1.50 to $14.74.
EOG Resources Inc. (NYSE: EOG) traded down about 0.5% to $82.70. The 52-week range is $57.15 to $91.48.
In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 1.4%, at $6.46 in a 52-week range of $5.78 to $14.30.
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