Natural Gas Inventories Rise Less than Expected, Prices Up

The U.S. Energy Information Administration (EIA) today reported the U.S. natural gas stocks rose by a total of 72 billion cubic feet, somewhat lower than the 80 billion cubic feet that analysts were expecting. Natural gas futures prices were slightly higher in advance of the EIA’s report at around $3.51/thousand cubic feet, and rose about 3% following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled 3.73 trillion cubic feet, about 269 billion cubic feet higher than the five-year average of 3.46 trillion cubic feet. Working gas in storage totaled 3.49 trillion cubic feet for the same period a year ago.

U.S. natural gas inventories are about 6.8% higher than they were a year ago and about 7.8% higher than the 5-year average.

Natural gas futures prices are about 85% higher than they were at their low point of $1.90/thousand cubic feet in April of this year. Working gas in storage remains above the high end of the 5-year average.

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 0.9% at $91.84 in a 52-week range of $73.90 to $93.36.

Chesapeake Energy Corp. (NYSE: CHK) is up about 3.7% at $20.07 in a 52-week range of $13.32 to $29.87.

EOG Resources Inc. (NYSE: EOG) is up about 1.4% at $111.05 in a 52-week range of $77.64 to $119.97.

The US Natural Gas Fund (NYSEMKT: UNG) is up about 4.4% at $23.29 in a 52-week range of $14.25 to $36.60. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up about 1.6% at $39.84 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