uploads///NG consumption June

Rising Natural Gas Consumption Supports Natural Gas Prices

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Jul. 1 2015, Updated 10:06 a.m. ET

Gas deliveries

Gas flows to the residential and commercial segments rose yesterday—compared to the previous day. However, gas deliveries fell week-over-week. Gas flows to the residential and commercial segments rose YoY (year-over-year). During the same period, gas deliveries to electric power plants rose more than 20%.

In contrast, weekly natural gas flows to electric power plants fell for the week ending June 26—compared to the previous week. Daily gas flows to electric power plants rose yesterday. The rise in daily gas flows to industrial and electrical power plants supported natural gas prices.

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The EIA (U.S. Energy Information Administration) published the weekly natural gas report on June 25, 2015. The weekly US gas stockpile rose by 75 Bcf (billion cubic feet) to 2,508 Bcf for the week ending June 19, 2015. The consensus of a rise in gas stocks will continue to put pressure on natural gas prices. The next EIA report is scheduled to release on July 2, 2015.

The rise in natural gas prices positively impacts oil and gas companies like Antero Resources (AR), Exco Resources (XCO), and Cimarex Energy (XEC). They account for 3.12% of the Spider Oil and Gas ETF (XOP). These companies also have a natural gas production mix that’s greater than 43% of their total production.

Energy ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP moved in the opposite direction of natural gas prices during trade on June 29. These ETFs consist of companies that produce crude oil and natural gas.

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