Natural Gas Price Jumps Following Low Inventory Build

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 17 billion cubic feet for the week ending July 22. Analysts were expecting a storage addition of around 29 billion cubic feet. The five-year average for the week is an injection of around 52 billion cubic feet, and last year’s storage addition for the week totaled 49 billion cubic feet. Natural gas inventories rose by 34 billion cubic feet in the week ending July 15.

Natural gas futures for September delivery traded up about 0.5% in advance of the EIA’s report, at around $2.73 per million BTUs, and traded near $2.80 afterward. Natural gas closed at $2.66 per million BTUs on Wednesday, after dropping from five-day high of $2.79 on Monday. The 52-week range for natural gas is $1.99 to $3.18. One year ago the price for a million BTUs was around $3.06.

Hot summer temperatures are expected to continue over the Lower 48 states through the weekend, except in the Great Lakes area. Early next week, temperatures are expected to rise there as well. Overall demand for natural gas is expected to be high next week.

Stockpiles are about 15% above their levels of a year ago and about 19% above the five-year average.

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The EIA reported that U.S. working stocks of natural gas totaled about 3.294 trillion cubic feet, around 524 billion cubic feet above the five-year average of 2.770 trillion cubic feet and 436 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.858 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 Thursday’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.8%, at $90.15 in a 52-week range of $66.55 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.6% to $5.28. The stock’s 52-week range is $1.50 to $9.55.

EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $79.96. The 52-week range is $57.15 to $89.52.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded up about 5.3%, at $8.37 in a 52-week range of $5.78 to $14.06.

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