Natural Gas Futures Weighed Down by Rise in Inventory

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 increased by 88 billion cubic feet last week, above the expected build of about 83 billion cubic feet anticipated by analysts. Natural gas futures prices were down nearly 2% in advance of the EIA's report, at around $3.95 per million BTUs, but slipped to around $3.90 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 1.87 trillion cubic feet, about 99 billion cubic feet lower than the five-year average of 1.96 trillion cubic feet. Working gas in storage totaled 2.6 trillion cubic feet for the same period a year ago.

Late season cool weather had little impact on inventories last week, as the spring weather began to warm. This week's build is above the five-year average for the week of 69 billion cubic feet. Added to the warmer weather are concerns that speculative long positions on natural gas futures will lead to a sell-off, depressing prices even further. Heavy demand for summer cooling remains several weeks away.

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 fractionally, at $91.02 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is up 0.8%, at $19.34 in a 52-week range of $13.32 to $22.97.

EOG Resources Inc. (NYSE: EOG) is down about 1%, at $136.50 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 1.5%, at $21.18 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down 1.1%, at $44.28 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