Natural Gas Inventories Rise Less Than Expected (XOM, CHK, EOG, UNG, OIH)

The U.S. Energy Information Administration (EIA) today reported the U.S. natural gas stocks rose by a total of 20 billion cubic feet, lower than the 24 billion cubic feet that analysts were expecting. Natural gas futures prices had risen about 0.4% in advance of the EIA’s report, but are declining now even though the build was smaller than expected.

The EIA reported that U.S. working stocks of natural gas totaled 3.26 trillion cubic feet, about 363 billion cubic feet higher than the five-year average of 2.9 trillion cubic feet. Working gas in storage totaled 2.82 trillion cubic feet for the same period a year ago.

U.S. natural gas inventories are about 16% higher than they were a year ago and nearly 13% higher than the five-year average. Both figures are lower than they were a week ago.

Natural gas futures prices are about 43% higher than they were at their low point of $1.90 per thousand cubic feet in April of this year. Working gas in storage remains above the high end of the five-year average, but the gap is narrowing. That could offer a little boost to gas prices going forward.

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is up about 0.5% at $88.43 in a 52-week range of $67.93 to $88.67. Chesapeake Energy Corp. (NYSE: CHK) is up about 0.3% at $19.02 in a 52-week range of $13.32 to $33.87. EOG Resources Inc. (NYSE: EOG) is up about 0.4% at $110.30 in a 52-week range of $66.81 to $119.97.

The US Natural Gas Fund (NYSEMKT: UNG) is down about 0.6% at $18.74 in a 52-week range of $14.25 to $41.60. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up about 1% at $40.97 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