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Decoding US Natural Gas Inventories by Region

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US natural gas inventories by region  

The EIA (U.S. Energy Information Administration) divides the United States into five storage regions:

  • East
  • Midwest
  • Mountain
  • Pacific
  • South Central

Below are the movements in natural gas inventories for these regions for October 14–21, 2016:

  • East: rose 14 Bcf (billion cubic feet) to 939 Bcf
  • Midwest: rose 22 Bcf to 1,115 Bcf
  • Mountain: rose 2 Bcf to 245 Bcf
  • Pacific: rose 1 Bcf to 326 Bcf
  • South Central: rose 34 Bcf to 1,284 Bcf 
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Natural gas inventories and prices  

The EIA estimates that US natural gas inventories will be ~4.0 trillion cubic feet by the end of October 2016, which is the start of the 2016–2017 heating season. According to these estimates, inventories would be the highest level on record for this period of the year.

The EIA also estimates that US natural gas inventories will be 1,876 Bcf by the end of March 2017, which would be 17.0% more than the five-year average. High US natural gas inventories could pressure natural gas prices. For more on inventories, read the previous part of this series.

Lower natural gas prices have a negative impact on the profitability of oil and gas producers such as EXCO Resources (XCO), WPX Energy (WPX), and Antero Resources (AR).

Uncertainty in crude oil and natural gas prices impact ETFs and ETNs such as the VelocityShares 3X Long Natural Gas ETN (UGAZ), the United States Oil ETF (USO), the United States Natural Gas ETF (UNG), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), the PowerShares DWA Energy Momentum ETF (PXI), and the VelocityShares 3x Inverse Natural Gas ETN (DGAZ).

The US natural gas rig count also plays a vital role in driving natural gas prices. Let’s look at that in the next part of this series. 

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