Natural Gas Prices React Badly to Inventory Report

24/7 Wall St.
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 111 billion cubic feet last week, well above the top of the range for an expected build of between 93 and 97 billion cubic feet anticipated by analysts. Natural gas futures prices were down about 1.8% in advance of the EIA's report, at around $3.93 per million BTUs, and fell sharply to around $3.85 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 2.25 trillion cubic feet, about 70 billion cubic feet lower than the five-year average of 2.32 trillion cubic feet. Working gas in storage totaled 2.87 trillion cubic feet for the same period a year ago. Natural gas inventories remain roughly in the middle of the five-year range.

Milder weather likely influenced the larger-than-expected increase in inventories. Late spring typically sees lower demand since both heating and cooling demands are diminished. Natural gas has been unable to hold its price about $4.00 for the past few days, and today's EIA report will not help.

Here is 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 0.3%, at $89.39 in a 52-week range of $79.46 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down 1.1%, at $21.27 in a 52-week range of $16.23 to $22.97.

EOG Resources Inc. (NYSE: EOG) is down about 0.3%, at $128.13 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 3.5%, at $20.62 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down fractionally, at $42.95 in a 52-week range of $32.54 to $45.80. 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