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US Natural Gas Inventories Impact Natural Gas Prices

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EIA’s natural gas inventories 

The EIA (U.S. Energy Information Administration) released its weekly natural gas inventory report on January 26, 2017. It reported that US natural gas inventories fell by 119 Bcf (billion cubic feet) to 2,798 Bcf from January 13–20, 2017.

US natural gas inventories hit 4,047 Bcf for the week ending November 11, 2016—the highest level ever. Changes in inventories impact natural gas (FCG) (BOIL) (UNG) (GASL) prices. For more on natural gas prices and the weather, read Part 1 and Part 2 of this series.

A market survey estimated that US natural gas inventories would have fallen by 117 Bcf from January 13–20, 2017. Natural gas (FCG) (DGAZ) (GASL) prices rose on January 26, 2017, due to a better-than-expected decline in inventories. For more on prices, read Part 1 of this series.

The five-year average natural gas withdrawal for this period is 176 Bcf. Natural gas inventories fell by 211 Bcf during the same period in 2016. They fell by 243 Bcf in the week ending January 13, 2017.

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What’s the impact? 

For the week ending January 20, 2017, US natural gas inventories were 0.7% lower than the five-year average. They’re also 11.1% less than the same period in 2016. Falling US natural gas inventories and the cold winter could support natural gas prices. High natural gas prices would have a positive impact on oil and gas producers’ profitability such as Southwestern Energy (SWN), Cimarex Energy (XEC), and Gulfport Energy (GPOR).

Next, we’ll take a look at US natural gas inventories by region. We’ll also look at the US natural gas inventory forecast for March 2017.

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