Natural Gas Inventory Takes Seasonal Drop

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 declined by 82 billion cubic feet last week, more than the expected decrease of 75 billion cubic feet compiled by Bloomberg. Natural gas futures prices were about 1.6% higher in advance of the EIA's report at around $3.37 per thousand cubic feet, and rose by a penny immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.72 trillion cubic feet, about 345 billion cubic feet higher than the five-year average of 3.38 trillion cubic feet. Working gas in storage totaled 3.66 trillion cubic feet for the same period a year ago.

Storage levels remain above the top of the five-year range and the draw on stocks is typical for the winter heating season. Gas prices are remain down more than 15% from recent highs around $3.93 per thousand cubic feet. Above average temperatures in heavily populated areas of the U.S. are also expected to continue weighing on prices.

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 0.5% at $88.03 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is up about 1% at $17.38 in a 52-week range of $13.32 to $26.09.

EOG Resources Inc. (NYSE: EOG) is down about 0.1% at $122.57 in a 52-week range of $82.48 to $124.49.

The US Natural Gas Fund (NYSEMKT: UNG) is up 2.7% at $19.53 in a 52-week range of $14.25 to $28.08. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down about 0.1% at $39.35 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