Natural Gas Inventories Rise, Price Up Slightly

The U.S. Energy Information Administration (EIA) today reported that U.S. natural gas stocks rose by a total of 26 billion cubic feet, in line with analysts expectations. Natural gas futures prices are about 1% higher this morning, at $3.10 per thousand cubic feet.

The EIA reported that U.S. working stocks of natural gas totaled 3.19 trillion cubic feet, about 435 billion cubic feet more than the five-year average of 2.75 trillion cubic feet. Working gas in storage totaled 2.7 trillion cubic feet for the same period a year ago.

U.S. natural gas inventories are about 18% higher than they were a year ago and nearly 16% higher than the five-year average. Both figures are lower than they were a week ago.

Natural gas futures prices are about 63% higher than they were at their low point of $1.90 per thousand cubic feet in April of this year. Prices are rising on lower production, fuel-switching and increased demand for electricity for air conditioning. The weather forecast for next week calls for somewhat cooler temperatures in many parts of the country, which could dampen the demand for cooling.

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is up about 0.5% at $85.65, in a 52-week range of $67.03 to $87.94. Chesapeake Energy Corp. (NYSE: CHK) is up about 5.4% at $18.22, in a 52-week range of $13.32 to $35.75. EOG Resources Inc. (NYSE: EOG) is up about 1.2% at $96.85, in a 52-week range of $66.81 to $119.97.

The US Natural Gas Fund (NYSEMKT: UNG) is up about 1.2% at $21.16, in a 52-week range of $14.25 to $43.88. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up about 3.3% at $38.49, in a 52-week range of $32.54 to $45.14. The first fund tracks spot prices; the second includes major drillers and services companies.

Paul Ausick