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Will the Natural Gas Inventory Fall for the Second Straight Week?

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Natural gas inventory

On December 9, 2015, the EIA (U.S. Energy Information Administration) will release its weekly natural gas inventory report. Last week, the US commercial natural gas inventory fell by 53 Bcf (billion cubic feet) to 3,956 Bcf for the week ending November 27, 2015. The natural gas inventory fell for the first time in the last 35 weeks. The US natural gas inventory fell due to a marginal fall in the natural gas production.

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Natural gas inventory estimates 

The natural gas inventory is expected to fall for the second week in a row. Market surveys project that the natural gas inventory could fall by 60 Bcf for the week ending December 10, 2015. The consensus of the falling inventory could benefit natural gas prices. The falling inventory implies that the supply is falling or the demand is rising.

The current natural gas stocks are 16% more than the level of 3,413 Bcf in 2014. They’re also 6.7% more than the five-year average of 3,709 Bcf. The natural gas inventory fell by 51 Bcf during the same period in 2014. The five-year average changes during this period of the year fell by 79 Bcf. The consensus of a record US natural gas inventory and the forecast of mild winter weather due to El-Mino could continue to put pressure on natural gas prices.

US upstream players like EXCO Resources (XCO), Chesapeake Energy (CHK), Antero Resources (AR), and Range Resources (RRC) are impacted by falling natural gas prices. The volatility in the energy market also impacts ETFs like the PowerShares DB Energy ETF (DBE) and the iShares US Oil Equipment & Services ETF (IEZ).

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