Natural Gas Prices Tumble as Supplies Hit New Record
The U.S. Energy Department’s weekly inventory release showed a larger-than-expected increase in natural gas supplies following which prices slid. With stocks at a new all-time high, the fuel is likely to stay depressed for a while.
About the Weekly Natural Gas Storage Report
The Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.
Analysis of the Data
Stockpiles held in underground storage in the lower 48 states rose by 9 billion cubic feet (Bcf) for the week ended Nov 20, 2015, above the guided range (of 4–8 Bcf gain) as per the analysts surveyed by Platts, the energy information arm of McGraw-Hill Financial Inc.
Following the past week’s climb, the current storage level – at 4.009 trillion cubic feet (Tcf) – is up 554 Bcf (16%) from last year and is 252 Bcf (6.7%) above the five-year average. Moreover, with this addition, natural gas inventories hit new record, getting past the previous highest level of 4 Tcf set previous week.
Natural Gas Tumbles After Supply Data
Gas prices skidded 7.8% to end the week at $2.21 per MMBtu Friday in a selloff spurred partly by the more-than-expected injection into storage. Traders were also stumped by predictions of tepid early-winter demand for the heating fuel due to mild weather.