Natural Gas Inventory Report Quells Rising Price

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 67 billion cubic feet last week, compared with an expected build of about 64 billion cubic feet anticipated by analysts. Natural gas futures prices were trading up by about 1.5% in advance of the EIA's report, at around $3.63 per million BTUs, and slipped to around $3.53 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.13 trillion cubic feet, about 45 billion cubic feet higher than the five-year average of 3.09 trillion cubic feet. Working gas in storage totaled 3.37 trillion cubic feet for the same period a year ago. Natural gas inventories remain roughly in the middle of the five-year range. The five-year average increase for the period is 66 billion cubic feet.

Demand for cooling rose with temperatures across the Midwest last week, but the high temperatures are forecast to drop sharply in the next couple of weeks, curbing demand for natural gas at power-generating plants. Lower temperatures are also expected across the heavily populated Northeast U.S. for the next two weeks.

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 about 1%, at $87.92 in a 52-week range of $84.70 to $95.49.

Chesapeake Energy Corp. (NYSE: CHK) is down 1.6%, at $25.91 in a 52-week range of $16.23 to $26.63.

EOG Resources Inc. (NYSE: EOG) is down 0.8%, at $158.12 in a 52-week range of $105.45 to $161.47.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 1.2%, at $18.56 in a 52-week range of $16.59 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down 0.6%, at $45.45 in a 52-week range of $36.24 to $46.78. The first fund tracks spot prices; the second includes major drillers and services companies.

Filed under: Commodities & Metals Tagged: CHK, EOG, OIH, UNG, XOM