Natural Gas Price Ticks Up Following Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 82 billion cubic feet for the week ending May 27. Analysts were expecting a storage addition of around 84 billion cubic feet. The five-year average for the week is an injection of around 98 billion cubic feet, and last year’s storage addition for the week totaled 126 billion cubic feet. Natural gas inventories rose by 71 billion cubic feet in the week ending May 20.

Natural gas futures for July delivery traded up about 0.7% in advance of the EIA’s report, at around $2.38 per million BTUs, and traded near $2.41 after the data release. Last Thursday, natural gas closed at $2.15 per million BTUs. The highest closing price for the past five trading days came Wednesday at $2.29 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 $3.04.

The forecast through June 8 calls for a strong spring storm over the Great Lakes and northeastern United States, bringing several days of cooler temperatures with it. Another massive storm over the Southwest and Texas is expected to dump more rain and bring temperatures down as well. The Southeast is expected to continue to warm up, as are parts of California away from the coast. Overall, natural gas demand is expected to be low, but trending higher next week.

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Stockpiles are about 32% above their levels of a year ago and 35% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.907 trillion cubic feet, around 753 billion cubic feet above the five-year average of 2.154 trillion cubic feet and 712 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.195 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 down about 1.7% at $87.70 in a 52-week range of $66.55 to $90.46. Exxon received a downgrade from Buy to Neutral from Merrill Lynch Thursday morning.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 1.5% to $4.30. The stock’s 52-week range is $1.50 to $13.47.

EOG Resources Inc. (NYSE: EOG) traded down about 1.3% to $79.71. The 52-week range is $57.15 to $91.48.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 0.1%, at $7.19 in a 52-week range of $5.78 to $14.30.

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