Natural Gas Inventory Build Tamps Down Price

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

The U.S. Energy Information Administration (EIA) today reported that the U.S. natural gas stocks increased by 43 billion cubic feet last week, substantially above the expected range for a build of about 28 billion cubic feet anticipated by analysts. Natural gas futures prices were down about 1% in advance of the EIA's report, at around $4.28 per million BTUs, but slipped to around $4.16 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 1.78 trillion cubic feet, about 118 billion cubic feet lower than the five-year average of 1.9 trillion cubic feet. Working gas in storage totaled 2.57 trillion cubic feet for the same period a year ago.

Late season cool weather had a smaller impact on inventories last week as the weather warmed. This week's build is well below the five-year average for the week of 67 billion cubic feet. Warmer spring weather is now expected to cut demand for natural gas over the next few weeks. Heavy demand for summer cooling remains several weeks away.

Natural gas prices on the NYMEX reached $4.444 yesterday, their highest level since July of 2011.

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 about 0.7%, at $88.13 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down about 0.7%, at $19.07 in a 52-week range of $13.32 to $22.97.

EOG Resources Inc. (NYSE: EOG) is up 0.3%, at $119.19 in a 52-week range of $82.48 to $138.20.

The US Natural Gas Fund (NYSEMKT: UNG) is down 4.2%, at $22.38 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up about 0.4%, at $42.38 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