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Natural Gas and Crude Oil Rise, Eastern Coal Falls Natural gas inventory
Every Thursday, the EIA (U.S. Energy Information Administration) publishes a natural gas inventory report for the previous week. The latest report is for the week ending October 2. Throughout the year, natural gas is stored underground to save the fuel for the peak demand during the winter. For the week ending October 2, the natural gas inventory came in at 3,633 Bcf (billion cubic feet) compared to 3,538 Bcf a week earlier.
The inventory figure was higher than 3,190 Bcf recorded the year before and the five-year average of 3,478 Bcf. The change of 95 Bcf in the underground inventory during the week ending October 2 came in lower than the 99 Bcf anticipated by Wall Street analysts.
Why is this report important?
Commodity prices are a function of supply and demand. If demand rises while supply remains constant, prices rise because more customers are chasing each unit of a commodity.
In contrast, if supply rises for a given level of demand, prices fall because the commodity is available in abundance. Inventory levels reflect supply and demand trends, so they’re useful for getting a sense of natural gas prices.
Impact on coal
The natural gas inventory has risen over the past 24 weeks since the injection season started. A lower-than-expected inventory indicates lower-than-expected supply or higher-than-expected demand. This bodes well for natural gas prices. A rise in natural gas prices is positive for thermal coal producers because utilities (XLU) burn more coal when natural gas prices rise.
The fall in natural gas prices over the last few months hurt coal producers (KOL), especially those with operations in the East and Midwest like Alliance Resource Partners (ARLP), Natural Resources Partners (NRP), Arch Coal (ACI), and Peabody Energy (BTU).
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Natural Resource Partners L.P.
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CODE : NRP |
ISIN : US63900P1030 |
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Natural Resources Partners est une société de production minière basée aux Etats-Unis D'Amerique. Natural Resources Partners détient divers projets d'exploration en USA. Son principal projet en exploration est D.D. SHEPARD en USA. Natural Resources Partners est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 1,1 milliards US$ (1,0 milliards €). La valeur de son action a atteint son plus bas niveau récent le 24 juillet 2020 à 10,00 US$, et son plus haut niveau récent le 26 avril 2024 à 91,73 US$. Natural Resources Partners possède 12 241 602 actions en circulation. |