Inventory data

In the week ended December 8, 2017, natural gas inventories fell by 69 Bcf (billion cubic feet) compared to the expected decline of 55 Bcf. In the same week, natural gas inventories reached 3,626 Bcf.

The EIA (Energy Information Administration) released this inventory report on December 14, 2017. On the same day, natural gas futures fell 1.1%.

Could Natural Gas Prices Rise after Release of Inventory Data?

Inventories spread has pressured natural gas prices

The gap between natural gas inventories and their five-year average level could directly impact natural gas prices. This gap is known as the inventories spread.

A negative inventories spread, or natural gas inventories below their five-year average, could boost natural gas prices. However, if the inventories spread becomes less negative or turns positive, it could stop natural gas gains or even cause prices to fall.

In the week ended December 8, the inventories spread was -0.7%, compared to -1.0% during the previous week. This trend could explain the fall in natural gas prices on December 14, 2017, after the EIA released its inventory data.

How much of a fall in inventories can encourage the bulls?

A fall of more than 123 Bcf in the natural gas inventories level is required to push the inventories spread deeper into negative territory. The market expects a fall of 160 Bcf in natural gas inventories.

If the EIA natural gas inventory report scheduled for December 21 meets the market’s expected fall, it could point to a bullish recovery in natural gas prices. On December 19, natural gas prices were only ~5.1% above their lowest closing price for 2017.

Many natural gas–heavy stocks such as WPX Energy (WPX), Gulfport Energy (GPOR), and Antero Resources (AR) have not been recently influenced by natural gas prices. As a result, indexes such as the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA), which contain energy stocks, could also ignore natural gas prices.

Latest articles

Apple (AAPL) investors have had a roller coaster week. Apple stock has lost just under 2% in a week, ending on August 23, 2019.

Competition taking a toll on Netflix as its share of US subscription video streaming market keep falling as rivals gain ground.

Crude oil production continues to rise, and oil prices remain at $50. Despite that, US energy stocks aren’t getting investors’ interest.

Apple stock fell 4.6% as the US-China trade war intensified today. China warned of tariffs on more US goods, followed by Trump's tweeted response.

In response to new tariffs from China and President Trump's tweets, the market tanked to session lows on Friday. The DJIA nosedived more than 600 points.

Coverage on Cresco Labs has increased from seven analysts in July to nine in August. Six analysts favor a “strong buy,” and three recommend a “buy.”