US natural gas inventory data
On September 17, 2015, the EIA (U.S. Energy Information Administration) published its weekly US natural gas stockpile report. The government data showed that the natural gas stockpile rose by 73 Bcf (billion cubic feet) to 3,334 Bcf for the week ending September 11, 2015. Likewise, the natural gas in storage rose by 68 Bcf to 3,261 Bcf for the week ending September 4, 2015.
Natural gas inventory estimates and impact
The natural gas stockpile rose for the 24th straight week for the week ending September 11, 2015. The Wall Street Journal projected that the natural gas stockpile could rise by 72 Bcf for the same period. The better-than-expected inventory increase led to the fall in natural gas prices. The inventory rose due to rising production despite warm weather forecast.
On September 9, 2015, the EIA published its monthly STEO (Short-Term Energy Outlook) report. The EIA showcased that the natural gas stocks could hit 3,840 Bcf by the end of October 2015. It’s 43 Bcf more than the five-year average. Currently, natural gas stocks are 15.80% more than the level of 2,878 Bcf in 2014. They’re also 125 Bcf more than the five-year average of 3,209 Bcf. The record inventory will continue to put pressure on natural gas prices.
Falling natural gas prices negatively impact energy producers like Rice Energy (RICE), EQT (EQT), and Cimarex Energy (XEC). These stocks account for 3.55% of the SPDR Oil and Gas ETF (XOP). The natural gas production mix of these companies is more than 43% of their total production. They also affect oil and gas ETFs like the Energy Select Sector SPDR ETF (XLE) and the SPDR Oil and Gas ETF (XOP).