Natural Gas Supply Increase Lower on Hurricane Shut-Ins (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 28 billion cubic feet, less than the 36 billion cubic feet that analysts were expecting. Natural gas futures prices were slightly lower in advance of the EIA’s report at around $2.77 per thousand cubic feet, and rose slightly following the EIA report. Prices have bounced to around $2.80 per thousand cubic feet.

The EIA reported that U.S. working stocks of natural gas totaled 3.4 trillion cubic feet, about 329 billion cubic feet higher than the five-year average of 3.1 trillion cubic feet. Working gas in storage totaled 3 trillion cubic feet for the same period a year ago.

U.S. natural gas inventories are about 13% higher than they were a year ago and about 11% higher than the 5-year average. Both figures have been falling by about 1% a week for the past several weeks.

Natural gas futures prices are about 45% 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 has been narrowed by about 50%. Natural gas storage facilities stand at about 82% of capacity, a level not normally reached until the end of September as injections ramp up in advance of expected winter heating demands.

Here’s 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 about 1.7% at $88.83 in a 52-week range of $67.93 to $88.91.

Chesapeake Energy Corp. (NYSE: CHK) is down about 0.7% at $19.41 in a 52-week range of $13.32 to $32.51.

EOG Resources Inc. (NYSE: EOG) is up about 2.3% at $111.00 in a 52-week range of $66.81 to $119.97.

The US Natural Gas Fund (NYSEMKT: UNG) is up about 0.8% at $18.98 in a 52-week range of $14.25 to $41.12. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up about 2.6% at $40.71 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