uploads///US NG rig count

Will EIA’s Natural Gas Inventory Data Fall for 8th Straight Week?


Jan. 28 2016, Updated 11:00 a.m. ET

EIA natural gas storage report 

The EIA (U.S. Energy Information Administration) will release its weekly US natural gas storage report today. Last week’s report showed that the US natural gas inventory had fallen by 178 Bcf (billion cubic feet) to 3,297 Bcf for the week ending January 15. That was the seventh consecutive week in which the natural gas stockpile fell. Market surveys project that the natural gas stockpile could fall by 207 Bcf for the week ending January 22, 2016. The consensus of a falling natural gas stockpile suggests higher demand for natural gas due to the cold winter weather and the snowstorm last week. If the natural gas stockpile falls more than expected, natural gas prices could rise. Read the previous part of this series to learn more about the weather forecast.

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US natural gas rig count

Baker Hughes (BHI) published its latest weekly natural gas rig count report on January 22, 2016. The data showed that the US natural gas rig count fell by eight rigs to 127 rigs for the week ending January 22. This is the lowest US natural gas rig count in the last decade. In 2015, the total US natural gas rig count fell by 166 rigs. The US natural gas rig count fell due to the fall in natural gas prices as a result of oversupply concerns. 

The record-low natural gas prices negatively affect natural gas producers like Rice Energy (RICE), Anadarko Petroleum (APC), Rex Energy (REXX), QEP Resources (QEP), and Gulfport Energy Corporation (GPOR). These companies’ natural gas production is more than 50% of their total production portfolio.

The ups and downs in the oil and gas market affect ETFs and ETNs like the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the VelocityShares 3X Long Natural Gas ETN (UGAZ), and the PowerShares DB Energy Fund (DBE).

Read the next part of this series for the latest natural gas price forecasts.


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