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Decoding US Natural Gas Inventories: Week Ending February 17

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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 10–17, 2017.

  • East – fell by 48 Bcf (billion cubic feet) to 431 Bcf
  • Midwest – fell by 30 Bcf to 612 Bcf
  • Mountain – fell by 4 Bcf to 146 Bcf
  • Pacific – rose by 1 Bcf to 206 Bcf
  • South Central – fell by 8 Bcf to 961 Bcf
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Natural gas inventories and prices  

US natural gas inventories are at 2,356 Bcf for the week ending February 17, 2017—10% 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 (BOIL) (DGAZ) (UNG) (GASL) prices.

Higher natural gas prices can have a positive impact on oil and gas producers’ profitability such as Cimarex Energy (XEC), Newfield Exploration (NFX), Memorial Resources (MRD), Cabot Oil & Gas (COG), 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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