Every week, the U.S. Energy Information Administration (EIA) releases the Natural Gas Report, which provides the latest reading on the nation’s energy reserves. The report provides commodity traders with a more comprehensive account of supply and demand as it pertains to natural gas and the broader energy market.
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Natural Gas Report: An Introduction
Every Thursday, the EIA releases weekly data on natural gas storage for the lower 48 states. The dataset captures the net change in the number of cubic feet stored in underground facilities over the preceding week, as well as historical comparisons with year-ago levels and the five-year average. The amount of natural gas in storage is reported in billions of cubic feet equivalent, or Bcf.
The weekly report captures Bcf stockpiles over a seven-day period ending the preceding Friday. For example, the Nov. 21, 2018 EIA Natural Gas Report captures inventory changes over the period from November 9 to 16, 2018. The report can be accessed directly on the EIA website through this link.
The five regional levels highlighted in the report include East, Midwest, Mountain, Pacific and South Central. As the following sample chart illustrates, data on South Central reserves is broken down further into salt versus non-salt stocks.
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Detailed charts on national and regional natural gas storage are also provided in the report. This includes a summary of underground storage capacity utilization by region, which helps traders determine current storage levels relative to overall capacity. Below is a snapshot of the Natural Gas Storage Dashboard for the week ended November 16, 2018:
Traders read the data to determine whether there was a net increase or a net decrease in the amount of working gas in storage week-on-week, year-on-year and in comparison to the five-year average. As one might expect, the forces of supply and demand have a direct impact on natural gas prices. For example, lower natural gas reserves tend to produce higher prices for the underlying commodity. When reserves rise, prices tend to fall.
The market’s response is usually based on how well the data perform relative to expectations. If stockpiles rise faster than expected, the impact could be negative on natural gas prices as it implies weaker demand. If stockpiles fall faster than expected in any given week, it could signal that demand is rising.
The Bottom Line
Commodities are a data-driven market, which means traders place considerable emphasis on the Natural Gas Report. Data on commercial crude inventories, natural gas storage and monthly production figures are used in tandem by traders to develop a more comprehensive view of the market.
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