Natural Gas Prices Slip as Stocks Rise

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 99 billion cubic feet last week, above the expected build of about 95 billion cubic feet anticipated by analysts. Natural gas futures prices were down nearly 1% in advance of the EIA's report, at around $4.03 per million BTUs, and slipped further to around $3.97 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 1.96 trillion cubic feet, about 83 billion cubic feet lower than the five-year average of 2.05 trillion cubic feet. Working gas in storage totaled 2.66 trillion cubic feet for the same period a year ago. Natural gas inventories are roughly in the middle of the five-year range.

Recent mild weather over most of the country has diminished demand for natural gas in the past couple of weeks. The forecast for the next week calls for above-normal temperatures across most of the country, except along the Gulf Coast and the northern tier of stages from Washington to the Midwest. Natural gas futures dropped as low as $3.89 per million BTUs last week, after reaching a peak of $4.44 on May 1.

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 0.4%, at $90.84 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down 2.6%, at $20.11 in a 52-week range of $13.32 to $22.97. Chesapeake's share drop is largely due to a downgrade to Neutral from J.P. Morgan.

EOG Resources Inc. (NYSE: EOG) is down about 0.9%, at $133.53 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 2.9%, at $21.36 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up fractionally, at $44.31 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