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Analyzing Natural Gas Inventories: Week Ending February 10

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US natural gas inventories by region 

The EIA (U.S. Energy Information Administration) divides the US into the following five natural gas storage regions:

  • East
  • Midwest
  • Mountain
  • Pacific
  • South Central

Below are the movements in natural gas inventories for the storage regions from February 3–10, 2017.

  • East – fell 41 Bcf (billion cubic feet) to 479 Bcf
  • Midwest – fell 43 Bcf to 642 Bcf
  • Mountain – fell 5 Bcf to 150 Bcf
  • Pacific – fell 3 Bcf to 205 Bcf
  • South Central – fell 22 Bcf to 969 Bcf
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Natural gas inventories and prices 

US natural gas inventories are at 2,445 Bcf for the week ending February 10, 2017—11% lower than the same period in 2016, as we discussed in the previous part of this series. Sharper-than-average falls in US natural gas inventories during the winter season could support US natural gas (UNG) (DGAZ) (BOIL) (GASL) prices.

Higher natural gas prices can have a positive impact on oil and gas producers’ profitability such as Cimarex Energy (XEC), Southwestern Energy (SWN), Memorial Resources (MRD), and EXCO Resources (XCO).

End of winter natural gas inventories 

The EIA estimates that US natural gas inventories will be at 1,805 Bcf by the end of March 2017—3.7% higher than the five-year average. High US natural gas inventories at the end of the winter heating season could pressure natural gas prices in 2017. Inventories start to build again at the end of the winter. For more on inventories, read the previous part of this series.

The US natural gas rig count also plays a vital role in driving natural gas prices. We’ll discuss the US natural gas rig count in the next part.

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