Natural Gas Market Reacts to the EIA’s Stockpile Report

Crude Oil and Natural Gas: Key Rig Count and Inventory Data

(Continued from Prior Part)

EIA’s natural gas stockpile report

The EIA (U.S. Energy Information Administration) releases the weekly natural gas report every Thursday. On June 25, 2015, the EIA reported that gas in storage rose by 75 Bcf (billion cubic feet) to 2,508 Bcf for the week ending June 19, 2015. Last week, the gas stockpile rose by 89 Bcf to 2,433 Bcf for the week ending June 12, 2015. Market surveys projected that natural gas inventories could rise by 80 Bcf for the week ending June 19, 2015. The lower-than-anticipated rise in gas stocks supported the rise in natural gas prices.

Warmer weather and demand from the electric power plants led to the fall in natural gas prices. This added to the rise in natural gas prices. The rising stocks imply that supply is rising or demand is falling. Natural gas stocks rose by 113 Bcf in the third week of June 2014. Last year, during the same period, inventories were at 1,813 Bcf. The current stockpile is 38.3% more than the levels last year. They’re also 1.4% more than the five-year average level of 2,473 Bcf.

Natural gas and crude oil producers like Ultra Petroleum (UPL), Cimarex Energy (XEC), and WPX Energy (WPX) are positively affected by rising natural gas prices. These companies also have a gas production mix that’s more than 43% of their total production. They account for 3.42% of the Spider Oil and Gas ETF (XOP).

ETFs like the Energy Select Sector SPDR ETF (XLE) and XOP fell in yesterday’s trade. They moved in the direction of crude oil prices. These ETFS consist of companies that produce crude oil and natural gas.

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Browse this series on Market Realist:

• Part 1 - Crude Oil Prices Fall More Due to Rising Gasoline Stocks

• Part 2 - How Do Crude Oil Inventories Influence the Crude Oil Market?

• Part 3 - US Refinery Input Surges, Crude Oil Rig Count Could Slow Down