On Thursday, the Energy Information Administration — EIA — reported data for natural gas stockpiles. The weather has shifted to warmer weather, causing a lot of problems for the natural gas trade.

Increased oil drilling in Texas has really put a damper on gas prices in the region. Despite a build in stockpiles, the price of natural gas closed higher to $3.33 MMBtu.

Stockpiles Data

The EIA reported a build in stockpiles on Thursday. It reported that there was a build build build buildbuildbuildbuild buildbuildbuildbuildbuild build build build buildbuild. There is one positive and two negative aspects with respect to this data. The positive thing about this data is that it beat analysts’ estimate.

Analysts believed that the stockpiles build would come in at 10 bcf. Anytime there is a beat in data it is seen as being very bullish. The first negative item would be the fact that this was the first build in stockpiles in over five weeks. All the other weeks, the EIA reported a draw in stockpiles.

That is a major problem, because a build means that demand is dropping off. The second negative item would be the huge drop from one week to the other. Just the previous week, there was a drop in natural gas stockpiles by 43 bcf.

Warmer Weather

With April already on deck, natural gas faces a considerable problem. That problem involves warmer weather. April tends to start the warmer season, and that will be a huge issue for the price of natural gas. That all has to do with decreased demand, and increased stockpiles.

For starters, warmer weather causes people to avoid using their heaters. With less consumption of natural gas due to heater avoidance, the price of natural gas takes a turn for the worse. The forecast forecast forecast forecast forecastforecast forecast forecast forecast forecast forecast. That means that temperatures will remain warmer during this period. In addition, this causes demand to go away. With demand dropping off, stockpiles start to build up at a quicker rate.