Natural Gas Price Dips Again After Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 147 billion cubic feet for the week ending December 9. Analysts were expecting a storage decline of about 125 billion cubic feet. The five-year average for the week is a withdrawal of around 79 billion cubic feet, and last year’s storage decline for the week totaled 46 billion cubic feet. Natural gas inventories fell by 42 billion cubic feet in the week ending December 2.

Natural gas futures for January delivery traded down around 1% in advance of the EIA’s report, at around $3.51 per million BTUs, and traded near $3.57 after the data release. Natural gas closed at $3.54 per million BTUs on Wednesday, after posting a five-day high of $3.78 last Friday. The 52-week range for natural gas is $2.50 to $3.78. One year ago the price for a million BTUs was around $2.79.

Demand for natural gas in the week ahead is expected to rise into the “very high” range over the next several days as two cold-air masses drop onto the Rockies and Plains, then move rapidly eastward to more densely populated parts of the country.

Stockpiles remain about 1.3% above their levels of a year ago and 5.1% above the five-year average.

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The EIA reported that U.S. working stocks of natural gas totaled about 3.806 trillion cubic feet, around 186 billion cubic feet above the five-year average of 3.620 trillion cubic feet and 50 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.856 trillion cubic feet for the same period a year ago.

The year-over-year decrease marks the first time in more than two years that current year storage has dropped below the prior year’s total.

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 essential flat at $90.59, in a 52-week range of $71.55 to $95.55.

Chesapeake Energy Corp. (NYSE: CHK) traded down about 0.1% to $7.07. The stock’s 52-week range is $1.50 to $8.15.

EOG Resources Inc. (NYSE: EOG) traded up about 0.2% to $103.96. The 52-week range is $57.15 to $109.37.

In addition, the United States Natural Gas ETF (NYSEMKT: UNG) traded down about 2.3%, at $8.76 in a 52-week range of $5.78 to $9.64.

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