Natural Gas Price Dips Following Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 37 billion cubic feet for the week ending June 24. Analysts were expecting a storage addition in a range of around 48 billion cubic feet. The five-year average for the week is an injection of around 78 billion cubic feet, and last year’s storage addition for the week totaled 73 billion cubic feet. Natural gas inventories rose by 62 billion cubic feet in the week ending June 17.

Natural gas futures for August delivery traded up in advance of the EIA’s report, at $2.91 per million BTUs, and traded near $2.88 after the data release. Natural gas closed at $2.86 per million BTUs on Wednesday, its highest closing price for the past 5 trading days after touching $2.97 earlier in the day. The 52-week range for natural gas is $1.99 to $3.18. One year ago the price for a million BTUs was around $3.18.

On Wednesday natural gas prices rose to their highest level since May on forecasts of higher than normal temperatures across most of the United States through mid-July. The South and the West, including all of Texas, are expected to see temperatures in the 90s or higher, but more moderate temperatures are expected in the Midwest and East until early next week. Temperatures are on the rise all across the country, boosting demand for electricity to run air conditioning. Demand is expected to be high at the end of next week and into the week following.

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Stockpiles are about 23% above their levels of a year ago and more than 25% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.140 trillion cubic feet, around 637 billion cubic feet above the five-year average of 2.503 trillion cubic feet and 582 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.558 trillion cubic feet for the same period a year ago.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.5% at $92.93 in a 52-week range of $66.55 to $92.98, and the high was posted earlier this morning.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 3.5% at $4.26. The stock’s 52-week range is $1.50 to $11.90.

EOG Resources Inc. (NYSE: EOG) traded down about 0.2% at $83.24. The 52-week range is $57.15 to $89.52.

The United States Natural Gas ETF (NYSEMKT: UNG) traded up about 1.8% at $8.59 in a 52-week range of $5.78 to $14.17.

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