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US Natural Gas Future Fell after the Natural Gas Inventory Report

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EIA’s natural gas inventory report

The EIA released its natural gas inventory report on November 30, 2017. US natural gas inventories fell by 33 Bcf (billion cubic feet) to 3,693 Bcf on November 17–24, 2017, according to the EIA. Inventories fell 0.8% week-over-week and by 309 Bcf or 7.7% year-over-year.

Wall Street analysts estimated that US natural gas inventories would have fallen by 37 Bcf on November 17–24, 2017. A less-than-expected fall in natural gas inventories pressured US natural gas (UGAZ) (UNG) (GASL) prices on November 30, 2017.

NYMEX natural gas futures are near a three-week high. Higher gas (UGAZ) (DGAZ) prices benefit gas producers (RYE) (FENY) like Exco Resources (XCO), Chevron (CVX), WPX Energy (WPX), and Antero Resources (AR).

US natural gas inventories’ historical context  

US natural gas inventories’ five-year average withdrawal for this period of the year was at 47 Bcf. Natural gas inventories fell by 50 Bcf during the same week in 2016. US natural gas inventories also fell by 46 Bcf for the week ending November 17, 2017.

US natural gas (GASL) (BOIL) prices fell on November 30, 2017, due to the fall in natural gas inventories—compared to historical averages. 

Impact  

US natural gas inventories were 21% above their five-year average during March 2017. However, they have fallen below their five-year average by 2.8% for the week ending November 24, 2017. Inventories rebalanced toward their historical average levels.

US gas inventories are expected to fall more in the coming months, according to the EIA. It’s positive for US natural gas (DGAZ) (FCG) prices.

Next, we’ll cover US natural gas rigs.

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