Natural Gas Inventory Less Than 10% Below 5-Year Average

Natural gas futures were trading down about 1.1% in advance of the EIA’s report, at around $3.80 per million BTUs, and jumped to around $3.85 immediately following the report, before pulling back to about flat. Natural gas futures have slipped by about $0.14 per million BTUs since last week.

Stockpiles are about 9% below their levels of a year ago and about 9.1% below the five-year average. The U.S. natural gas injection season ends next week, and the EIA earlier this month lowered its end-of-October total inventory estimate from 3.55 trillion cubic feet to 3.53 trillion cubic feet. Last year’s injection season ended with 3.8 trillion cubic feet in inventory.

The northern and Midwestern states may again see some cooler temperatures this week, pushing up demand for heating. However the weather is not expected to be cool enough or to last long enough to drive a significant increase in natural gas prices.

The EIA reported that U.S. working stocks of natural gas totaled 3.39 trillion cubic feet, about 338 billion cubic feet below the five-year average of 3.73 trillion cubic feet. Working gas in storage totaled 3.73 trillion cubic feet for the same period a year ago. Natural gas inventories continue to rise, but remain below the bottom of the five-year range.

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

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, was up about 1.2%, at $94.29 in a 52-week range of $86.91 to $104.76.

Chesapeake Energy Corp. (NYSE: CHK) was up nearly 2.6%, at $22.11 in a 52-week range of $16.69 to $29.92. The stock was upgraded from Neutral to Buy at UBS Wednesday.

EOG Resources Inc. (NYSE: EOG) was up about 1.7%, at $93.61. The 52-week range is $78.01 to $118.89.

The United States Natural Gas ETF (NYSEMKT: UNG) was trading flat at $19.60, in a 52-week range of $16.91 to $27.89.

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