Natural Gas Price Dips After Limited Storage Decline

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 63 billion cubic feet for the week ending March 23. The winter heating season, when natural gas demand typically reaches its peak, ends next week.

Analysts were expecting a storage withdrawal of around 87 billion cubic feet. The five-year average for the week is a withdrawal of 46 billion cubic feet, and last year’s storage decrease for the week totaled 43 billion cubic feet. Natural gas inventories fell by 86 billion cubic feet in the week ending March 16.

Natural gas futures for May delivery traded up about 2.2% in advance of the EIA’s report, at around $2.76 per million BTUs, and slipped to around $2.74 shortly after the report was released.

The forecast for overall natural gas demand next week falls into the “moderate” range as milder-than-normal conditions are expected to prevail in the Northeast through the weekend. Both the South and the West are also expected to experience some warming.

Total U.S. stockpiles fell week over week to 32.7% below last year’s level and are now 20% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 1.383 trillion cubic feet at the end of last week, around 346 billion cubic feet below the five-year average of 1.729 trillion cubic feet and 672 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 2.055 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 today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 1.6% to $73.98, in a 52-week range of $72.67 to $89.30.
  • Chesapeake Energy Corp. (NYSE: CHK) traded up about 1.7%, at $3.03 in a 52-week range of $2.53 to $6.59.
  • EOG Resources Inc. (NYSE: EOG) traded up about 1.2% to $105.04. The 52-week range is $81.99 to $119.00.

Also, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.6%, at $22.66 in a 52-week range of $20.40 to $31.72.

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