Price Rises Following Natural Gas 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 65 billion cubic feet last week, compared with an expected build of about 67 billion cubic feet anticipated by analysts. Natural gas futures prices were trading slightly lower in advance of the EIA's report, at around $3.55 per million BTUs, and increased to around $3.58 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.25 trillion cubic feet, about 46 billion cubic feet higher than the five-year average of 3.21 trillion cubic feet. Working gas in storage totaled 3.43 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 62 billion cubic feet.

Natural gas prices have been falling as traders prepare for the annual slump between summer cooling demand and winter heating demand. Hurricane Humberto currently poses no threat to Gulf of Mexico production, and another storm developing off the Yucatan is expected to move westward, away from Gulf production platforms. The share of U.S. natural gas production that comes from the Gulf of Mexico has dropped from 16% in 2005 to just 4.2%.

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 0.5%, at $88.36 in a 52-week range of $84.70 to $95.49.

Chesapeake Energy Corp. (NYSE: CHK) is up 0.3%, at $26.97 in a 52-week range of $16.23 to $27.29.

EOG Resources Inc. (NYSE: EOG) is up 0.7%, at $168.29 in a 52-week range of $107.76 to $168.77. The high was set earlier Thursday morning.

The US Natural Gas Fund (NYSEMKT: UNG) is up 2.4%, at $19.14 in a 52-week range of $16.59 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is down 0.6%, at $47.37 in a 52-week range of $36.24 to $47.76. The first fund tracks spot prices; the second includes major drillers and services companies.

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