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Natural Gas Inventory Rises for 33rd Straight Week


Nov. 20 2015, Published 12:11 p.m. ET

US natural gas inventory

On Thursday, November 19, 2015, the EIA (U.S. Energy Information Administration) released its Weekly Natural Gas Inventory Report. The data highlighted that natural gas inventories rose by 15 Bcf (billion cubic feet) to 4,000 Bcf, or 4 Tcf (trillion cubic feet), for the week ending November 13, 2015. This is the highest record for natural gas inventories.

Natural gas inventories have risen for 33 straight weeks as of the week ended November 13, 2015. During this period, natural gas inventories added about 2,539 Bcf.

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Industry surveys estimated that natural gas inventories could rise by 19 Bcf for the week ending November 13, 2015. Natural gas storage is divided into five regions by the EIA. They are East, Midwest, Mountain, Pacific, and South Central.

The South Central, East, and Midwest regions contributed to the rise in natural gas inventories. However, Mountain and Pacific storage regions saw falls in inventory.

Current natural gas inventories are 11.2% higher than last year’s level of 3,596 Bcf. They are also 5.5% higher than the five-year average of 3,793 Bcf. Natural gas inventories hit a record due to rising production and mild winter weather. Natural gas production rose for the tenth straight year.

Despite the fall in natural gas prices, production increased due to improving efficiency and lower drilling costs. Natural gas production will likely increase by 6.3% to 79.61 Bcf per day (billion cubic feet) in 2015 and then by 2% to 81.20 Bcf per day in 2016.

Long-term lower natural gas prices affect natural gas producers such as Newfield Exploration (NFX), EQT (EQT), EOG Resources (EOG), Cabot Oil & Gas (COG), Range Resources (RRC), and Southwestern Energy (SWN).

Volatility also affects ETFs such as the PowerShares DB Energy ETF (DBE) and the PowerShares DWA Energy Momentum ETF (PXI).


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