Huge Natural Gas Inventory Increase Weighs on Prices

Natural gas futures prices were trading up slightly in advance of the EIA’s report, at around $4.57 per million BTUs, and slipped to around $4.48 immediately following the report.

For the same week a year ago stockpiles rose by 95 billion cubic feet and the five-year average for the week is an increase of 81 billion cubic feet. Stockpiles are about 24% below their levels of a year ago and about 31% below the five-year average.

Next week’s forecast calls for a warming trend over most of the United States. Stormy weather is expected over the northern half of the country, but temperatures are set to rise as high pressure builds. Demand for cooling rises with the temperatures.

The EIA reported that U.S. working stocks of natural gas totaled 1.83 trillion cubic feet, about 822 billion cubic feet below the five-year average of 2.65 trillion cubic feet. Working gas in storage totaled 2.52 trillion cubic feet for the same period a year ago. Natural gas inventories are rising again, but remain well below the bottom of the five-year range.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was down about 1%, at $101.09 in a 52-week range of $84.79 to $104.61.

Chesapeake Energy Corp. (NYSE: CHK) was also down about 1%, at $30.50 in a 52-week range of $20.14 to $31.49.

EOG Resources Inc. (NYSE: EOG) was down about 0.8% to $114.73. The 52-week range is $65.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was down 2.3%, at $24.62 in a 52-week range of $16.59 to $27.89.

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