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How Did Regional Natural Gas Inventories Move Last Week?

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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 21–28, 2016:

  • East: rose one Bcf (billion cubic feet) to 940 Bcf
  • Midwest: rose 15 Bcf to 1,130 Bcf
  • Mountain: rose four Bcf to 249 Bcf
  • Pacific: flat at 326 Bcf
  • South Central: rose 34 Bcf to 1,318 Bcf 
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Natural gas inventories and prices  

The EIA estimated that US natural gas inventories would be at 3,979 Bcf by October 31, 2016, which is the start of the 2016–2017 heating season. According to these estimates, inventories would be at the highest level on record for this period of the year. US natural gas inventories hit 4,009 Bcf on November 20, 2015, which was the highest ever.

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% higher 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 impacts 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 Direxion Daily Energy Bear 3x ETF (ERY), 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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