Will US Natural Gas Inventories Support Prices?
EIA’s natural gas inventories
On June 22, 2017, the EIA (U.S. Energy Information Administration) released its weekly natural gas inventory report. It reported that US natural gas inventories rose by 61 Bcf (billion cubic feet) to 2,770 Bcf on June 9–16, 2017. Inventories fell 10.5% from the same period in 2016.
An S&P Global Platts survey estimated that US natural gas inventories would have risen by 58 Bcf on June 9–16, 2017. US natural gas (GASL) (UNG) (DGAZ) prices were flat on June 22, 2017, despite the rise in inventories.
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US natural gas inventories by region
Changes in natural gas inventories for the storage regions on June 9–16, 2017, are mentioned below:
- East – rose by 22 Bcf (billion cubic feet) to 513 Bcf
- Midwest – rose by 22 Bcf to 656 Bcf
- Mountain – rose by 5 Bcf to 182 Bcf
- Pacific – rose by 7 Bcf to 281 Bcf
- South Central – rose by 5 Bcf to 1,138 Bcf
US natural gas inventories are 8.1% more than the five-year average for the week ending June 16, 2017. In March 2017, inventories were 21.0% higher than the five-year average. The expectation of slowing inventories could support US natural gas prices. If the upcoming summer weather is warmer than the expectations, it could impact inventories and support prices.
In the next part, we’ll discuss the how the US natural gas rig count, production, and consumption impact prices.