Natural Gas Prices Tumble Following Storage Report

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 95 billion cubic feet last week, compared with an expected build of 88 billion cubic feet anticipated by analysts. Natural gas futures prices were down about 1% in advance of the EIA's report, at around $3.69 per million BTUs, and fell to around $3.62 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 2.53 trillion cubic feet, about 31 billion cubic feet lower than the five-year average of 2.56 trillion cubic feet. Working gas in storage totaled 3.05 trillion cubic feet for the same period a year ago. Natural gas inventories remain roughly in the middle of the five-year range.

Hot weather is expected throughout the West next week, along with warmer temperatures in the Northeast and along the northern tier of states. The Southeast and Midwest are expected to experience below normal temperatures. Most analysts think that the United States will need to see a general heat wave that lasts for a longish time in order to soak up production and existing inventories.

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 up 0.6% at $90.37 in a 52-week range of $82.02 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is up 2%, at $20.77 in a 52-week range of $16.23 to $22.97.

EOG Resources Inc. (NYSE: EOG) is up 1.4%, at $133.73 in a 52-week range of $83.89 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 3.2%, at $19.20 in a 52-week range of $17.38 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up 0.8%, at $43.04 in a 52-week range of $33.12 to $45.80. The first fund tracks spot prices; the second includes major drillers and services companies.

Filed under: Energy (Economy) Tagged: CHK, EOG, OIH, UNG, XOM