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Trump Could Impact Natural Gas Supplies in the Medium Term

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Weekly US natural gas supplies  

PointLogic reported that US natural gas supplies rose 0.5% to 77.4 Bcf (billion cubic feet) per day from November 10–16, 2016. However, US natural gas supplies fell 1.9% from the same period in 2015. The fall in natural gas supplies is bullish for natural gas prices.

Higher natural gas prices have a positive impact on natural gas producers’ earnings such as Antero Resources (AR), Newfield Exploration (NFX), and Memorial Resources (MRD).

Natural gas imports from Canada fell 3.8% to 5 Bcf per day from November 10–16, 2016. Imports from Canada were 5.8 Bcf per day during the same period in 2015. The rise in domestic natural gas production contributed to the overall rise in US natural gas supplies during the period.  

For more on monthly natural gas production and forecasts, read Monthly US Natural Gas Production Fell in October. Read Does US Natural Gas Production Depend on Natural Gas Rigs? for more on the US crude oil rig count.

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Impact of Trump on natural gas supplies  

In his energy policy, Donald Trump highlighted that he would reduce regulatory restrictions on exploration and production of natural gas and crude oil. He would open more federal land for exploration and production activity. If these policies are implemented, it would increase the natural gas supplies in an oversupplied natural gas market.

Natural gas supplies influence US natural gas inventories. For more on natural gas inventories, read Part 4 of this series. High supplies and inventories can pressure natural gas prices. Lower natural gas prices can have a negative impact on oil and gas producers’ earnings such as Antero Resources (AR), Newfield Exploration (NFX), and Memorial Resources (MRD).

The rollercoaster ride in crude oil and natural gas prices can impact funds such as the United States Natural Gas ETF (UNG), the PowerShares DWA Energy Momentum ETF (PXI), the Direxion Daily Energy Bear 3x ETF (ERY), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), and the First Trust ISE-Revere Natural Gas ETF (FCG).

Read the next part of this series for the latest updates on natural gas consumption.

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