Natural Gas Prices Up as Storage Declines

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 145 billion cubic feet last week, slightly more than the decline of 134 billion cubic feet anticipated by analysts. Natural gas futures prices were up about 1% in advance of the EIA's report, at around $3.73 per million BTUs, and quickly rose more than an additional 1% to $3.78 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 1.94 trillion cubic feet, about 198 billion cubic feet higher than the five-year average of 1.74 trillion cubic feet. Working gas in storage totaled 2.38 trillion cubic feet for the same period a year ago.

The drop below 2 trillion cubic feet of gas in storage indicates that inventory levels are very likely to close the winter only a few percentage points above the five-year average. That should improve prices for the nation's gas producers. Weather forecasts for the next 10 days call for below-normal temperatures in much of the United States, with above-normal temperatures in the Southeast and on into Texas.

Natural gas prices have been rising for the past week, and tomorrow's rig count report could boost prices again if gas rig counts continue to drop.

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 up 0.3%, at $89.54 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is up 3.1%, at $22.06 in a 52-week range of $13.32 to $26.09.

EOG Resources Inc. (NYSE: EOG) is up 1.3%, at $131.52 in a 52-week range of $82.48 to $138.20.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is up 2.3%, at $20.73 in a 52-week range of $14.25 to $23.38. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up 1%, at $43.24 in a 52-week range of $32.54 to $45.12. The first fund tracks spot prices; the second includes major drillers and services companies.

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