US: EIA Natural Gas Report

Thu Nov 16 09:30:00 CST 2017

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Weekly Change -18bcf 15bcf

Natural gas in storage fell 18 billion cubic feet in the November 10 week to 3,772 bcf. The first weekly decline after 32 consecutive weekly increases signals the traditional start of the heating season, when weekly drawdowns are the norm. The decrease contrasts with a 30 bcf increase in the same week a year ago and a 6 bcf average increase during the corresponding week in the last 5 years, while taking natural gas stocks to a level 6.7 percent lower than last year's exceptionally high, mild-winter-bloated inventories and 2.6 percent below 5-year average for this time of year.

Storage levels have indicated a gradual tightening in the natural gas market since late August, when stocks first fell below the 5-year average. However, stocks remain well within the 5-year range for the period, and while prices did rise about 20 cents in November to around $3.00 per MMBTu, they are 23 percent below this year's highs set at the start of the year and have responded only feebly to the tightening.

The Energy Information Administration (EIA) provides weekly information on natural gas stocks in underground storage for the U.S. and five 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 may lead to increases in natural gas prices. 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 natural gas prices.