The U.S. Energy Department's latest inventory report showed a slightly larger-than-expected increase in natural gas supplies. Despite this bearish data, futures ended the week higher, driven by forecasts for strong cooling demand.
However, natural gas remains down year to date, facing persistent challenges as the market reacts sharply to unpredictable weather patterns. Investors should focus on resilient stocks like Range Resources and Coterra Energy (NYSE: CTRA), while it may be wise to avoid higher-risk options like Comstock Resources (NYSE: CRK) amid the prevailing market instability.
Natural Gas Build Larger Than Market Expectations
Stockpiles held in underground storage in the lower 48 states rose 58 billion cubic feet (Bcf) for the week ended Sept. 13, slightly above analysts' guidance of a 57 Bcf addition. The increase compared with the five-year (2019-2023) average net injection of 80 Bcf and last year's growth of 62 Bcf for the reported week.
The weekly build put total natural gas stocks at 3,445 Bcf, which is 194 Bcf (6%) above the 2023 level and 274 Bcf (8.6%) higher than the five-year average.
The total supply of natural gas averaged 107.2 Bcf per day, down 0.6 Bcf per day on a weekly basis, due to lower shipments from Canada and falling dry production.
Meanwhile, daily consumption dropped to 95.4 Bcf from 96.6 Bcf in the previous week, mainly reflecting weakness in residential/commercial usage and a dip in deliveries to U.S. LNG export facilities.
Natural Gas Prices Still Finish Higher
Natural gas prices climbed last week, despite a slightly unfavorable inventory build. October futures closed at $2.434 on the New York Mercantile Exchange, ...
