US: EIA Natural Gas Report

Thu Sep 15 09:30:00 CDT 2016

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Weekly Change 62bcf 36bcf

Natural gas in storage rose 62 billion cubic feet in the September 9 week to 3,499 bcf. The year-on-year gain in gas stocks shrank by 0.4 percentage points from the previous week to 5.6 percent. The gain on the 5-year average also continued to erode, falling 0.5 percentage points from the prior week to 9.3 percent. Weekly builds of natural gas in storage have been consistently smaller than last year throughout this year's spring-summer build phase of the annual cycle, reducing the very swollen levels seen in early spring. Natural gas futures jumped up about 5 cents to around $2.89 per MMBtu immediately following the release of the report.

The Energy Information Administration (EIA) provides weekly information on natural gas stocks in underground storage for the U.S. and three regions of the country. The level of inventories helps determine prices for natural gas products.

Natural gas product prices are determined by supply and demand - just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in natural gas. If inventories are high and rising in a period of strong demand, prices may not need to increase at all, or as much. During a period of sluggish economic activity, demand for natural gas may not be as strong. If inventories are rising, this may push down oil prices.