Any concerns that recent changes to the Energy Information Administration's (EIA) natural gas storage reporting sampling process might affect energy markets appear unfounded as the government agency reported that the old and new samples were not much different, but that the new sampling procedure produced more accurate estimates.
The EIA replaced its sample for the EIA-912 survey over a transition period that began with the release of the Weekly Natural Gas Storage Report on May 22, 2008, and was complete with the release of June 12, 2008 (the affected working gas estimates were for weeks ending May 16, 2008, through June 6, 2008).
Prior to implementation of the new sample in the published estimates, both samples were used in parallel to estimate weekly natural gas storage stocks from May 4, 2007, through May 9, 2008. In a report released Wednesday that describes the change in sampling procedure, the EIA found that:
Commenting on the new sampling procedure, Edward Morse, an analyst with Lehman Brothers, said the new process was "much ado about sampling" and that the new methodology should not "materially impact" energy markets.
"The new methodology is essentially a continuation of the old estimation process and the adjustment should soon be forgotten by market participants," he noted in a research note. "This adjustment would only materially impact markets if it systematically provided more bullish or bearish data than the previous method; the EIA released no data to suggest that this is the case."
The EIA report, Discussion of the Sample Changes for the Weekly Natural Gas Storage Report, is available at http://www.eia.doe.gov/oil_gas/natural_gas/ngs/samplechg.html.
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