Natural Gas Inventory Falls as Expected, Price Stays Flat

Blue flames of a gas stove
Blue flames of a gas stove

The U.S. Energy Information Administration (EIA) today reported the U.S. natural gas stocks fell by a total of 73 billion cubic feet last week, right in the middle of an expected withdrawal range of 51 to 90 billion cubic feet. Natural gas futures prices were about 0.7% lower in advance of the EIA's report at around $3.68 per thousand cubic feet, and rose fractionally immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.8 trillion cubic feet, about 168 billion cubic feet higher than the five-year average of 3.64 trillion cubic feet. Working gas in storage totaled 3.84 trillion cubic feet for the same period a year ago.

Withdrawals are normal for this time of year, but absent much colder weather, drawdowns of this size will have little impact on gas in storage or on prices. The only good news for producers is that working gas in storage is now just slightly below last year's level at this time.

Here's how stocks of the largest U.S. natural gas producers are reacting to today's report:

Exxon Mobil Corp. (NYSE: XOM), the country's largest producer of natural gas, is down about 0.3% at $87.48 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down about 0.4% at $17.04 in a 52-week range of $13.32 to $26.09.

EOG Resources Inc. (NYSE: EOG) is down about 1% at $117.56 in a 52-week range of $82.48 to $124.49.

The US Natural Gas Fund (NYSEMKT: UNG) is up about 0.8% at $21.17 in a 52-week range of $14.25 to $31.20. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down about 0.3% at $38.89 in a 52-week range of $32.54 to $45.14. The first fund tracks spot prices; the second includes major drillers and services companies.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Commodities, Oil & Gas, Research Tagged: CHK, EOG, OIH, UNG, XOM