Natural gas inventory
The EIA (U.S. Energy Information Administration) is scheduled to release its weekly natural gas stockpile report on December 3, 2015. Last week, the EIA published that natural gas stocks rose by 9 Bcf (billion cubic feet) to 4,009 Bcf for the week ended November 20, 2015. Natural gas inventory rose due to rising natural gas production and mild winter weather forecast during that period.
Natural gas inventory estimates
Natural gas stocks rose for 34 consecutive weeks for the week ended November 20, 2015. In the last 34 weeks, 2,548 Bcf of natural gas stocks were added to the total natural gas stockpile. Market surveys project that natural gas stocks could fall for the week ended November 27, 2015. As a result, prices rose in November 30, 2015, trade.
Cold winter weather and slowing production might have affected natural gas inventories during this period. However, the weather is expected to be mild in the coming weeks. Production is expected to slow down in the short term, but it’s expected to rise in 2016.
The current natural gas stocks are 16% higher than the 2014 level of 3,455 Bcf. They’re also 6.7% more than the five-year average of 3,757 Bcf. A record natural gas stockpile will continue to put pressure on natural gas prices.
The long-term lower natural gas prices will affect oil and gas producers such as ConocoPhillips (COP), Cimarex Energy (XEC), Newfield Exploration (NFX), EOG Resources (EOG), and Range Resources (RRC). ETFs such as the PowerShares DB Energy ETF (DBE) and the PowerShares DWA Energy Momentum ETF (PXI) are also affected by volatility in the energy market.