Natural Gas Price Inches Higher Following Storage Report

Energy

Published: July 14, 2016 11:05 am

Last Updated: January 13, 2020 5:43 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 64 billion cubic feet for the week ending July 8. Analysts were expecting a storage addition in a range of 55 billion to 65 billion cubic feet. The five-year average for the week is an injection of around 77 billion cubic feet, and last year’s storage addition for the week totaled 98 billion cubic feet. Natural gas inventories rose by 39 billion cubic feet in the week ending July 1.

Natural gas futures for August delivery traded up about 0.7% in advance of the EIA’s report, at around $2.71 per million BTUs, and traded near $2.73 after the data release. Natural gas closed at $2.74 per million BTUs on Wednesday, after dropping from $2.80 on Friday. The 52-week range for natural gas is $1.99 to $3.18. One year ago the price for a million BTUs was around $3.13.

Warmer weather — in some cases, much warmer — is expected to settle over the Lower 48 states next week, raising demand for air conditioning and, with it, demand for natural gas to fuel electricity generation. Some cooling is expected this weekend over the Great Lakes, mid-Atlantic and northeastern United States, but a massive blanket of hot weather is forecast for all but the Northwest region of the country beginning early next week. Demand for natural gas is expected to be high next week.

Stockpiles are about 19% above their levels of a year ago and about 22% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.243 trillion cubic feet, around 586 billion cubic feet above the five-year average of 2.657 trillion cubic feet and 507 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.736 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 s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 0.4%, at $95.45 in a 52-week range of $66.55 to $95.53, and the high was posted Thursday morning.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 2.1% to $4.44. The stock’s 52-week range is $1.50 to $11.69.

EOG Resources Inc. (NYSE: EOG) traded up about 0.9% to $84.57. The 52-week range is $57.15 to $89.52.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 0.3%, at $8.14 in a 52-week range of $5.78 to $14.06.

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