EIA’s natural gas report
The EIA (U.S. Energy Information Administration) will publish the weekly natural gas report on Thursday, June 18, 2015. Last week, the government report showed that gas in storage rose by 111 Bcf (billion cubic feet) to 2,344 for the week ending June 5, 2015. Mild weather led to the massive increase in the gas stockpile. Market surveys by Bloomberg show that the natural gas in storage could increase by 94 Bcf for the week ending June 12, 2015.
Warmer weather could drag down natural gas estimates. The current stockpile estimates are 17 Bcf lower than the estimates last week. Despite the warmer weather, a better-than-expected increase in the natural gas stockpile could put pressure on natural gas prices. The current gas stockpile is 43.7% above the level of 1,591 Bcf in 2014. It’s also 2% more than the five-year average stockpile of 2,300 Bcf. The average natural gas increase during the five-year period is at 87 Bcf.
In contrast, slowing production, the tropical storm, and warmer weather estimates could continue to put pressure on natural gas prices. Upstream producers like Chevron (CVX), Antero Resources (AR), and Rex Energy (REXX) are impacted by the increase and decrease of natural gas prices. These companies account for 3.89% of the Spider Oil and Gas ETF (XOP). They also have a natural gas production mix that’s more than 45% of their production portfolio.
Energy ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP are also affected by the volatility in natural gas prices.