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Looking Ahead: What to Expect from US Natural Gas Prices

PART:
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Part 4
Looking Ahead: What to Expect from US Natural Gas Prices PART 4 OF 8

Analyzing US Natural Gas Inventories: Week Ending March 10

US natural gas inventories by region 

The EIA (U.S. Energy Information Administration) divides the US into the following five natural gas storage regions:

  • East
  • Midwest
  • Mountain
  • Pacific
  • South Central

Analyzing US Natural Gas Inventories: Week Ending March 10

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Below are the movements in natural gas inventories for the storage regions from March 3–10, 2017.

  • East – fell by 36 Bcf (billion cubic feet) to 368 Bcf
  • Midwest – fell by 22 Bcf to 557 Bcf
  • Mountain – fell by 2 Bcf to 137 Bcf
  • Pacific – rose by 2 Bcf to 203 Bcf
  • South Central – rose by 5 Bcf to 977 Bcf

Natural gas inventories and prices  

US natural gas inventories are at 2,242 Bcf for the week ending March 10, 2017—21.4% higher than their five-year average, as we discussed in the previous part of this series. High US natural gas inventories could pressure US natural gas (DGAZ) (GASL) (BOIL) (UNG) prices.

Lower natural gas prices can have a negative impact on oil and gas producers’ profitability such as Cimarex Energy (XEC), Cabot Oil & Gas (COG), Newfield Exploration (NFX), and Rex Energy (REXX).

Estimates for natural gas inventories  

The EIA estimates that US natural gas inventories will be at 1,805 Bcf by the end of March 2017—38.2% higher than the five-year average. High US natural gas inventories at the end of the winter heating season could pressure natural gas prices in the coming months. Inventories start to build again at the end of the winter. For more on inventories, read the previous part of this series.

The US natural gas rig count also plays a vital role in driving natural gas prices. We’ll discuss the US natural gas rig count in the next part.

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