Natural gas stockpile report
On September 10, 2015, the EIA (U.S. Energy Information Administration) is scheduled to release its weekly natural gas in storage report for the week ending September 4, 2015. Last week, government data showed that the natural gas stockpile rose by 94 Bcf (billion cubic feet) to 3,193 Bcf for the week ending August 28, 2015. Likewise, natural gas stocks rose by 69 Bcf for the week ending August 21, 2015.
Natural gas stockpile estimates
For the week ending August 28, 2015, the natural gas inventory rose for the 22nd straight week. If the natural gas stockpile rises for the week ending September 4, 2015, the natural gas inventory will have risen for the 23rd consecutive week. Market surveys project that the natural gas inventory could rise by 80 Bcf for the week ending September 4, 2015. The five-year average rise over this period is at 63 Bcf. The natural gas inventory rose by 90 Bcf over the same period last year. Currently, natural gas stocks are 18% more than the levels last year.
Rising natural gas stocks imply that supply is rising or demand is falling. The record inventory and estimates of rising natural gas stocks could negatively influence natural gas prices. However, the recent rise in natural gas prices benefits natural gas producers likes Rice Energy (RICE), Cimarex Energy (XEC), and Devon Energy (DVN). They account for 3.47% of the SPDR Oil and Gas ETF (XOP). These companies’ natural gas production mix is more than 43% of their total production.
Oil and gas ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP also benefit from rising natural gas prices.