Natural gas inventory data
In the week ending May 25, natural gas inventories rose by 96 Bcf (billion cubic feet) to 1,725 Bcf—based on the EIA’s (U.S. Energy Information Administration) data announced on May 31. The increase was 7 Bcf less than what a survey by S&P Global Platts expected. On May 31, natural gas July futures rose 2.3%.
Inventories spread and natural gas prices
In the week ending May 25, the negative difference between natural gas inventories and their five-year average contracted by 90 basis points compared to the previous week. The difference is called the “inventories spread.” For the week ending May 25, the inventories spread was at -22.5%.
In the week ending May 18, the inventories spread was at -23.4%. Natural gas prices are usually inversely related to the inventories spread. However, the relationship seems to be more biased towards the downside for prices when inventories rise above the five-year average. The market might be confident about having ample future supplies instead of being concerned about demand getting out of hand.
On May 31–June 5, natural gas July futures fell 2.1%. On May 31, the EIA released the natural gas inventory report for the week ending May 25.
Higher inventory levels
On June 7, the EIA is scheduled to release the natural gas inventory report for the week ending June 1. Any rise below 81 Bcf would push the inventories spread further into negative territory—a factor that might help natural gas bulls.