Natural Gas Inventory Rises Sharply, Weighs on Price

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By Paul Ausick

The U.S. Energy Information Administration (EIA) reported Friday morning that U.S. natural gas stocks increased by 40 billion cubic feet for the week ending November 7, compared with an expected increase of 38 billion cubic feet anticipated by analysts. The five-year average injection for the week is around 16 billion cubic feet.

Natural gas futures for January delivery were trading up about 1.3% in advance of the EIA’s report, at around $4.14 per million BTUs, and slipped to around $4.10 immediately following the report. Natural gas futures have dropped by more than $0.30 per million BTUs since last week.

Stockpiles are about 5.7% below their levels of a year ago and about 6.2% below the five-year average. The U.S. natural gas injection season ended on October 31 with an actual total of 3.57 trillion cubic feet in storage. Last year’s injection season ended with 3.80 trillion cubic feet in inventory.

Temperatures dived across the northern tier of states late last week, and the cold temperatures have headed toward the heavily populated areas of the East Coast. That will have an impact on the storage report that comes out next week, but the moderate temperatures across much of the United States all of last week are responsible for the inventory build we see in this week’s report. This is the 30th consecutive week thatnaturalgas inventories have risen more than the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled 3.61 trillion cubic feet, about 237 billion cubic feet below the five-year average of 3.83 trillion cubic feet and 220 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.83 trillion cubic feet for the same period a year ago. Natural gas inventories continue to rise, but remain below the bottom of the five-year range.

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