EIA’s gas stocks report
The EIA (U.S. Energy Information Administration) publishes the weekly natural gas report every Thursday. This week, the report is scheduled to release on July 9, 2015. Last week, government data showed that US natural gas inventories rose by 69 Bcf (billion cubic feet) to 2,577 Bcf for the week ending June 26, 2015. Wall Street Journal surveys suggest a rise in gas inventories by 85 Bcf for the week ending July 3, 2015. Over the same period, Citigroup estimates show a rise in inventory by 93 Bcf.
A rise in inventories for the week ending July 3, 2015, would mean that natural gas stocks rose for 14 consecutive weeks. The consensus of the rising stockpile will continue to put pressure on natural gas prices. Mild weather could have caused natural gas inventories to rise. The current natural gas stocks are 34% more than the total gas stockpile of 1,915 Bcf last year. They’re also 1% more than the five-year average inventories of 2,548 Bcf. The five-year average inventory gain during this period is at 75 Bcf. During the same period last year, natural gas stocks rose by 94 Bcf. The record natural gas inventories will continue to put downward pressure natural gas prices.
The massive fall in natural gas prices impacts oil and gas ETFs like the Energy Select Sector SPDR ETF (XLE) and the Spider Oil and Gas ETF (XOP). They also affect oil and gas producers like Sandridge (SD), Stone Energy (SGY), and Parsley Energy (PE). They account for 3.85% of the Spider Oil and Gas ETF (XOP). These stocks also have a gas production mix that’s greater than 46% of their total production.