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EIA Weekly Natural Gas Storage Report: How to Read & Analyze

Rock River Minerals | Jul 29, 2019
One of the most important factors in determining the value of mineral rights is the price of natural gas, which is directly affected by the Energy Information Administration (EIA) Weekly Gas Storage Report. This report contains information about the nation’s natural gas inventory levels. If a mineral rights and royalty owner is looking to buy or sell their rights, this report can provide valuable insight into the market direction and seasonal trends. For example, natural gas prices and demand are known to rise during the winter months, as it is necessary for heating. This type of information helps mineral rights and royalty owners understand present and predict future cash flow based on historical demand and current inventory situations. 

Who is the EIA?

The Energy Information Administration (EIA) is a government agency that collects, analyzes, and publicizes independent and impartial energy information. According to eia.gov, “The Department of Energy Organization Act of 1977 established the EIA as the primary federal government authority on energy statistics and analysis.” The department provides policymakers, as well as the general public, with essential information so that both can be well informed about the energy market. 

Deciphering the EIA Natural Gas Storage Report?

The Natural Gas Storage Report (a.k.a. Inventory Report) shows weekly estimates of natural gas volumes held in underground storage. The report accumulates inventory numbers from across five regions in the United States: East, Midwest, Mountain, Pacific, and South Central. The gas stored underground is referred to as “working gas” or “base gas,” and the total volume of stored natural gas appears in units of BCF – billions of cubic feet. The report shows inventory levels for the current week and the previous week, as well as the net change across each region. It also tracks natural gas inventory from the previous year, and it gives a five-year historical average for each region. The South Central region also details inventory for “salt” and “nonsalt” areas. Natural gas is typically found in depleted oil and gas fields (nonsalt), and in certain regions, salt caverns or aquifers serve as storage for natural gas (salt). Storage in “salt” areas can be more expensive, which is why the EIA details this information. Figure 1 (see below) shows an example of a recent inventory report. 
If natural gas inventories increase more than is expected, it implies lower demand for the resource, which results in bearish sentiment for natural gas prices. On the other hand, if natural gas inventories increase less than is expected – or if there is a decline in inventories – it indicates strong demand for the resource. Stronger demand results in bullish sentiment for natural gas prices, meaning the price index likely rises immediately following the release of the EIA report. 

Where to Find the EIA Weekly Natural Gas Storage Report?  

You can find the EIA Weekly Natural Gas Storage Report on the U.S. Energy Information Administration website at http://ir.eia.gov/ngs/ngs.html. The standard release time is every week on Thursday at 10:30 a.m. (Eastern Time), excluding holidays. 

Summary

The EIA Weekly Natural Gas Storage Report provides estimates of natural gas volumes held in underground reservoirs, insight into the current demand for natural gas, and influence to the commodity price. The information is pertinent to mineral rights and royalty owners as the value of their assets and expected cash flow unequivocally correlate with the price of natural gas. 

Have questions about your mineral and royalty rights? Contact us.

1 Investing.com. (2019, July 25). U.S. Natural Gas Storage. Retrieved from https://www.investing.com/economic-calendar/natural-gas-storage-386


2 Investopedia. (2019, June 25). Natural Gas Storage Indicator (EIA Report). Retrieved from  https://www.investopedia.com/terms/n/natural-gas-storage-indicator-eia-report.asp


3 Zacks. (2017, March 13). EIA Reports Larger-than-Expected Natural Gas Draw. Retrieved from https://www.zacks.com/stock/news/252548/eia-reports-largerthanexpected-natural-gas-draw


4 Place Trade Financial. (2019). What is the EIA Natural Gas Report? Retrieved from http://www.us.placetrade.com/index.php/get-help/845-eia-natural-gas-report


5 MineralWise. (2019, July 25). Mineral Rights Value. Retrieved from https://www.mineralweb.com/owners-guide/unleased-mineral-owner/mineral-rights-value/


6 EIA. (2019, July 25). Weekly Natural Gas Storage Report. Retrieved from http://ir.eia.gov/ngs/ngs.html


7 EIA. (2019). About EIA. Mission and Overview. Retrieved from https://www.eia.gov/about/mission_overview.php


The content of this website is provided solely for general informational purposes, and not as legal or other professional advice.


The information on this website is not a substitute for, and does not replace the advice or representation of, a licensed attorney, certified public accountant or other professional. Although Rock River Minerals goes to great lengths to make sure the information on the website is accurate and up-to-date, we make no claim as to the accuracy of this information and are not responsible for any EIA Weekly Natural Gas Storage Report consequences that may result from reliance on the information contained in this website.


We recommend that you consult with a licensed attorney for assurance that the information on the website and your interpretation of it are appropriate for your particular situation. You should not rely on this website as a source of legal advice.
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