Natural Gas Inventory Slips, Sending Prices Higher

Energy

Published: February 13, 2014 10:45 am

Last Updated: April 28, 2020 2:20 am

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 237 billion cubic feet for the week ending February 7, compared with an expected drop of 228 billion to 232 billion cubic feet anticipated by analysts. Natural gas futures prices were trading about 0.1% higher in advance of the EIA’s report, at around $4.96 per million BTUs, and rose to around $5.04 immediately following the report.

Natural gas prices rose to a multiyear high of $5.58 per million BTUs two weeks ago, but prices have been declining despite a forecast for continued cold weather and snowy conditions. The price declines are at least partly due to fuel-switching back to coal at some power generation plants due to the relatively higher price of natural gas.

The EIA reported that U.S. working stocks of natural gas totaled 1.69 trillion cubic feet, about 631 billion cubic feet below the five-year average of 2.32 trillion cubic feet. Working gas in storage totaled 2.55 trillion cubic feet for the same period a year ago. Natural gas inventories remain below the bottom of the five-year range.

Here is how stocks of the largest U.S. natural gas producers reacted to this report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was down about 0.2% to $90.91, in a 52-week range of $84.79 to $101.74.

Chesapeake Energy Corp. (NYSE: CHK) was down 0.4%, at $24.64 in a 52-week range of $18.21 to $29.06.

EOG Resources Inc. (NYSE: EOG) was down fractionally at $174.88. The 52-week range is $112.05 to $188.30.

The U.S. Natural Gas Fund (NYSEMKT: UNG) was up about 4%, at $24.72 in a 52-week range of $16.59 to $27.31. The Market Vectors Oil Services ETF (NYSEMKT: OIH) was down fractionally to $46.85, in 52-week range of $39.42 to $51.11. The first fund tracks spot prices; the second includes major drillers and services companies.

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