US: EIA Natural Gas Report

Thu Jun 22 09:30:00 CDT 2017

Actual Previous
Weekly Change 61bcf 78bcf

Natural gas in storage rose 61 billion cubic feet in the June 16 week to 2,770 bcf. The twelfth consecutive weekly injection since the traditional end of the heating season was slightly smaller than the 63 bcf seen in the same week last year, but most analysts had expected an even smaller build as Tropical Storm Cindy dampened Gulf of Mexico production and as hotter weather in parts of the country increased the consumption of natural gas for electricity generation. The weekly injection put natural gas stocks 10.5 percent below last year's level at this time, when inventories were exceptionally large due to a low-consumption mild winter. Gas inventories are 8.1 percent above the 5-year average, however, and remain in the upper half of the 5-year historical range. Natural gas futures initially fell about 5 cents to $2.84 per MMBTu immediately following the EIA report, but prices quickly recovered and rose above pre-release levels.

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.