The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 74 billion cubic feet for the week ending April 21. Analysts surveyed by S&P Global Platts expected a storage injection of 74 billion cubic feet. The five-year average for the week is an injection of around 57 billion cubic feet, and last year's storage injection for the week totaled 64 billion cubic feet. Natural gas inventories rose by 54 billion cubic feet in the week ending April 14.
Natural gas futures for June delivery traded down by about 1.6% in advance of the EIA's report, at around $3.22 per million BTUs, and traded around $3.25 shortly after the data release. Natural gas closed at $3.27 per million BTUs on Wednesday, the highest close for the past five trading days. The 52-week range for natural gas is $2.72 to $3.62. One year ago the price for a million BTUs was around $2.90.
According to Platts Analytics Bentek Energy, warmer weather across the United States caused demand to tumble from the prior week. Mitch DeRubis, a quantitative modeling analyst with Platts Analytics, said:
The week was characterized by warming over the entire country, with every region averaging at least 2.3 degrees above the previous week’s average. The Southeast and Texas showed slightly higher demand week-over-week, up a combined 0.8 Bcf/d. However, the decline in demand in the other regions totaled 3.6 Bcf/d, with drops concentrated in the Northeast and Midwest regions, which both saw total demand decline by 1.4 Bcf/d each on average. The bulk of the drops were attributable to decreased residential and commercial demand.
Platts Analytics expects supply and demand estimates to translate into much larger injections in the East and Midwest regions, while the other three EIA regions are expected to see small increases compared to the previous week.
Stockpiles fell week over week to about 14% below last year's level and are now 15.8% above the five-year average.
The EIA reported that U.S. working stocks of natural gas totaled about 2.189 trillion cubic feet, around 299 billion cubic feet above the five-year average of 1.890 trillion cubic feet and 358 billion cubic feet below last year's total for the same period. Working gas in storage totaled 2.547 trillion cubic feet for the same period a year ago.
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Here's how share prices of the largest U.S. natural gas producers reacted to this latest report:
Exxon Mobil Corp. (XOM), the country's largest producer of natural gas, traded down about 0.3%, at $81.13 in a 52-week range of $80.30 to $95.55.
Chesapeake Energy Corp. (CHK) traded down about 3.1% to $5.30. The 52-week range is $3.56 to $8.20.
EOG Resources Inc. (EOG) traded down about 2.4% to $92.013. The 52-week range is $77.04 to $109.37.
Also, the United States Natural Gas ETF (UNG) traded down about 0.2%, at $7.51 in a 52-week range of $6.36 to $9.74.