Yahoo Finance Did the US Natural Gas Inventory Rise Last Week?
Natural Gas Prices Hit a 1-Month Low: Forecasts for 2016 and 2017
EIA’s natural gas inventory
On May 26, 2016, the EIA (U.S. Energy Information Administration) released its Weekly Natural Gas Inventory Report. The government agency reported that the US natural gas inventory rose by 71 Bcf (billion cubic feet) to 2,825 Bcf for the week ending May 20, 2016, as compared to the previous week.
Market surveys from the Wall Street Journal projected that natural gas inventories may have risen by 68 Bcf for this period. The larger-than-expected rise in natural gas inventories led to the fall of natural gas prices. For more on natural gas prices, read the previous part of this series. The five-year average natural gas addition during this period is 97 Bcf. For the same period in 2015, natural gas inventories added 117 Bcf.
US natural gas inventories by region
The EIA divides the United States into five storage regions: the East, Midwest, Mountain, Pacific, and South Central regions. The South Central, Midwest, and East regions contribute to the majority of US natural gas inventories. Below are the movements in crude oil inventories for these regions for the week ending May 20, as compared to the previous week:
The East region saw a rise of 21 Bcf to 511 Bcf.
The Midwest region saw a rise of 23 Bcf to 629 Bcf.
The Mountain region saw a rise of 5 Bcf to 171 Bcf.
The Pacific region saw a rise of 5 Bcf to 298 Bcf.
The South Central saw a rise of 17 Bcf to 1,216 Bcf.
Impact of natural gas inventories
Nationwide natural gas inventories are 36.5% higher than in the corresponding period in 2015. They’re also 37.4% higher than the five-year average. High natural gas inventories could put pressure on natural gas prices.
Lower natural gas prices impact natural gas producers like Gulfport Energy (GPOR), Rice Energy (RICE), Antero Resources (AR), and Range Resources (RRC).
The roller-coaster ride in natural gas and crude oil prices affects ETFs and ETNs such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the Direxion Daily Natural Gas Related Bull 3x Shares ETF (GASL), the Fidelity MSCI Energy Index ETF (FENY), and the First Trust ISE-Revere Natural Gas ETF (FCG).
The US natural gas rig count and natural gas production also play a vital role in driving natural gas prices. To learn more, please read the next two parts of this series.
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