Commodities & Metals

Natural Gas Inventory Build Weighs Down Price

Blue flames of a gas stove
Source: thinkstock
The U.S. Energy Information Administration (EIA) today reported the U.S. natural gas stocks increased by 59 billion cubic feet last week, compared with an expected build of between 54 billion and 58 billion cubic feet anticipated by analysts. Natural gas futures prices were down more than 1% in advance of the EIA’s report, at around $3.40 per million BTUs, and slipped further to around $3.35 immediately following the EIA report.

The EIA reported that U.S. working stocks of natural gas totaled nearly 2.85 trillion cubic feet, about 34 billion cubic feet lower than the five-year average of 2.88 trillion cubic feet. Working gas in storage totaled 3.1921 trillion cubic feet for the same period a year ago. Natural gas inventories remain roughly in the middle of the five-year range.

In the same week last year, natural gas inventories rose by 28 billion cubic feet and the five-year average build for the week is 47 billion cubic feet.

A poll of commodity analysts has raised the expected average price of natural gas in 2013 from $3.84 per million BTUs to $3.87. The earlier poll was taken in April.

Here is 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 down 1.9%, at $91.89 in a 52-week range of $84.70 to $95.49. Exxon also reported poor second-quarter earnings earlier this morning.

Chesapeake Energy Corp. (NYSE: CHK) is up 6.2% to $24.76, after posting a new 52-week high of $25.20 earlier this morning. The company posted solid earnings this morning.

EOG Resources Inc. (NYSE: EOG) is up 3.2% to $150.16, after posting a new 52-week high of $151.01 earlier this morning. The 52-week low is $95.28.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 1.7%, at $17.90 in a 52-week range of $17.38 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up 1.6%, at $45.54 in a 52-week range of $36.24 to $46.78. The first fund tracks spot prices; the second includes major drillers and services companies.

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