US: EIA Natural Gas Report

Thu May 04 09:30:00 CDT 2017

Actual Previous
Weekly Change 67bcf 74bcf

Natural gas in storage rose 67 billion cubic feet in the April 28 week to 2,256 bcf. The fifth consecutive weekly increase since the traditional end of the heating season on March 31 and the start of the injection phase of the annual cycle puts gas stocks 13.7 percent below last year's oversized level, bloated by lower than average heating consumption due to mild weather. Gas stocks are 15.5 percent higher than the average for the comparable period in the last 5 years, however, and remain in the upper half of the 5-year historical range. The E.I.A.'s short term energy outlook expects an increase of about 1,750 bcf through this summer's injection season, suggesting inventories at the end of October will not match the record high end-of-injection period levels set in October last year. The long term trend for gas consumption shows electricity generation drawing on gas supplies to a rapidly increasing extent. The heating season may be becoming a smaller factor for gas storage levels, given that gas has overcome coal for the first time in 2016 for electricity generation, producing 33.8 percent of the nation's electric power.

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.