Will the Natural Gas Inventory Rise for the 32nd Consecutive Week?



Natural gas inventory report

The EIA (U.S. Energy Information Administration) is scheduled to release the natural gas stockpile report on November 13, 2015. Last week, the natural gas in storage rose by 52 Bcf (billion cubic feet) to 3,929 Bcf for the week ending October 30, 2015. The active natural gas in storage rose for the 31st consecutive week. During this period, natural gas stocks added 2,468 Bcf as of the week ending October 30, 2015.

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Natural gas inventory consensus

The current momentum of rising natural gas suggests that the natural gas inventory could rise for the 32nd straight week. The preliminary estimates from Bloomberg and the Wall Street Journal project that the natural gas inventory could rise by 50 Bcf and 52 Bcf, respectively, for the week ending November 6, 2015. The estimates of the rising natural gas production are driving the natural gas stocks higher. This winter is also expected to be warmer than last year due to the El Nino weather pattern. It will also increase the natural gas stocks due to weak demand.

The EIA estimated that natural gas stocks hit 3,929 Bcf for the week ending October 30, 2015, in its latest STEO (Short-Term Energy Outlook) report on November 10, 2015. It’s the highest record since November 2012. However, the EIA added that natural gas inventories could rise to 4 trillion cubic feet in the short term. The five-year average gain during this period of the year is 23 Bcf. The consensus of rising natural gas stocks will continue to weigh on natural gas prices.

US oil and gas producers like Rice Energy (RICE), Devon Energy (DVN), Newfield Exploration (NFX), and EXCO Resources (XCO) are affected by the long-term lower natural gas prices. ETFs like the PowerShares DB Energy ETF (DBE) and the PowerShares DWA Energy Momentum ETF (PXI) are also impacted by the roller coaster ride of oil and gas prices.


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