Stocks

The Energy Information Administration (EIA) on Thursday reported a larger-than-average storage withdrawal that exceeded consensus estimates, and prices got a bounce after some overnight selling.

While the debate rages over whether exporting liquefied U.S. natural gas is a good idea, stocks of natural gas liquids (NGL) are so abundant, export of some is viewed as a necessity. And in the United States, more chemical sector demand can’t come fast enough.

While the debate rages over whether exporting liquefied U.S. natural gas is a good idea, stocks of natural gas liquids (NGL) are so abundant, export of some is viewed as a necessity. And in the United States, more chemical sector demand can’t come fast enough.

Given the state of natural gas liquids (NGL) markets, it should come as no surprise that U.S. propane inventories (including propylene stocks) hit a record high at the end of September while the average weekly spot price at Mont Belvieu, TX, hit a low not seen since the third quarter of 2009, according to the Energy Information Administration (EIA).

With natural gas stocks at levels below the seasonal norm after a summer of market rebalancing, analysts at Bank of America Merrill Lynch (BofA) Monday lifted their 2013 average gas price forecast by 25 cents to $3.75/MMBtu.

August natural gas futures closed lower Thursday following the weekly government inventory report showing stocks were built at a greater rate than had been anticipated.

January natural gas futures drifted lower Wednesday as traders elected to trade within a narrow range, all the while debating what Thursday’s government inventory report would show. At the end of an uninspired day January futures fell 6.1 cents to $5.462 and February shed 6.5 cents to $5.513. January crude oil rose $1.97 to $72.66/bbl on a supportive petroleum inventory report.

A handful of economic, market and meteorological factors have reshaped the outlook for natural gas liquids (NGL), building stocks of ethane in the face of an evaporating market and potentially adding to downward pressure on natural gas prices in the first quarter should the coming winter be one of modest temperatures.

A handful of economic, market and meteorological factors have reshaped the outlook for natural gas liquids (NGL), building stocks of ethane in the face of an evaporating market and potentially adding to downward pressure on natural gas prices in the first quarter should the coming winter be one of modest temperatures.