Natural Gas Stocks Fall, Prices Rise (XOM, CHK)

By Paul Ausick Published Dec 8, 11:45AM EST

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The US Energy Information Administration today reported the US natural gas stocks fell by a total of 20 billion cubic feet, about 40%-50% more than the drawdown of 10-12 billion cubic feet that analysts had expected. Natural gas prices responded by rising about 2.5% at Henry Hub, to $3.51/thousand cubic feet.

The EIA reported that US working stocks of natural gas totaled 3.83 trillion cubic feet, about 300 billion cubic feet higher than the five-year average of 3.52 trillion cubic feet. Working gas in storage totaled 3.73 trillion cubic feet for the same period a year ago.

Natural gas producers did not realize a share price bump following today’s report. Exxon Mobil Corp. (NYSE: XOM), the largest gas producer in the US, is down about -1.3% and Chesapeake Energy Corp. (NYSE: CHK) is down nearly -3.7%.

The Henry Hub spot price for natural gas was $3.38/thousand cubic feet on December 5th, more than $1/thousand cubic feet lower than the $4.53/thousand cubic feet price on December 4th a year ago. The rapid development of shale gas production in the US is mainly responsible for the price compression.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.