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The Rise or Fall of US Natural Gas Prices in 2Q17

PART:
1 2 3 4 5 6 7 8
Part 4
The Rise or Fall of US Natural Gas Prices in 2Q17 PART 4 OF 8

Decoding US Natural Gas Inventories: Week Ended March 31

US natural gas inventories by region

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

  • East
  • Midwest
  • Mountain
  • Pacific
  • South Central

Decoding US Natural Gas Inventories: Week Ended March 31

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Below are the movements in natural gas inventories for the storage regions from March 24–31, 2017.

  • East – fell 10.0 Bcf (billion cubic feet) to 268.0 Bcf
  • Midwest – fell 7.0 Bcf to 479.0 Bcf
  • Mountain – rose 1.0 Bcf to 142.0 Bcf
  • Pacific – rose 4.0 Bcf to 216.0 Bcf
  • South Central – rose 14.0 Bcf to 946.0 Bcf

Natural gas inventories and prices 

US natural gas inventories were 2,051 Bcf for the week ended March 31, 2017. That’s 14.8% higher than their five-year average, as we saw in the previous part of this series. The EIA estimates that US natural gas inventories will be 3,861 Bcf by the end of October 2017. That would be 0.50% lower than the five-year average.

The fall in US natural gas inventories in the coming months is bullish for US natural gas (UGAZ) (UNG) (FCG) (GASL) prices. Higher natural gas prices can have a positive impact on the profitabilities of oil and gas producers such as Cimarex Energy (XEC), Newfield Exploration (NFX), and Rex Energy (REXX). 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 take a look at the US natural gas rig count in the next part of this series.

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