Working gas in storage was 2,988 Bcf as of Friday, September 19, 2014, according to EIA estimates. This represents a net increase of 97 Bcf from the previous week. Stocks were 386 Bcf less than last year at this time and 426 Bcf below the 5-year average of 3,414 Bcf. The 97 Bcf increase is 29 Bcf above the 5-year average for this week.
It now appears storage may get up to 3,600 Bcf before winter begins. That would be 235 Bcf below the 5-year average.
Joe Bastartdi is saying October will be mild, but the eastern 2/3 of the country should be getting the first winter blast in November. He is still forecasting a colder winter than last year with a lot more snow because El Nino will be pumping more moisture into the "Polar Vortex".
I am expecting the natural gas price to stay in the $4.00 range through October, then it is all up to the weather.
Natural Gas Storage Report - Sept 25
Natural Gas Storage Report - Sept 25
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Sept 25
From Zacks: "With August becoming the eighth consecutive record-breaking month of 2014 in terms of natural gas output, prices continue to suffer. From a peak of about $13.50 per MMBtu in 2008 to around $3.95 now – sinking in between to a 10-year low of under $2 in 2012 – the plummeting value of natural gas represents a decline of over 70% over six years. In the absence of major production cuts, we do not expect much upside in gas prices in the near term."
I agree, the only thing that will save U.S. natural gas prices in 2015 is a very cold winter.
As I have been saying for over two year now: KEEP YOU PORTFOLIOS HEAVILY WEIGHTED TO OIL.
I do think we could see a brief spike to the $5.00 range if we get a cold start to winter, but it won't last. There is just too much associated gas coming on-line in the shale plays.
I agree, the only thing that will save U.S. natural gas prices in 2015 is a very cold winter.
As I have been saying for over two year now: KEEP YOU PORTFOLIOS HEAVILY WEIGHTED TO OIL.
I do think we could see a brief spike to the $5.00 range if we get a cold start to winter, but it won't last. There is just too much associated gas coming on-line in the shale plays.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Sept 25
From Stifel on September 29:
Lowering Gas Price Forecast
We are lowering our long-term NYMEX natural gas price forecast 15% to $4.25/MMBtu from $5.00. The change causes us to lower our NAV estimates an average of 8% (Figure 1). We are also trimming our 4Q14 NYMEX gas forecast 11% to $4.25 from $4.75, which lowers our 4Q14 EPS/CFPS estimates an average of 6%/3% (7%/4% below Street consensus) (Figure 2). Our 2015 NYMEX gas price forecast remains $4.25.
The October NYMEX futures contract expired last Friday at $3.98. Our prior 4Q14 forecast of $4.75, which contemplated natural price support from record low storage levels last spring, implies an average price of $5.12 for November and December. After robust injections exceeded the five-year average storage build over the past 23 consecutive weeks, $5 gas in 4Q14 is unlikely barring a much colder-than-normal autumn.
Storage is on pace to finish the injection season (11/1/14) near 3.5 Tcf, approximately 300 Bcf or 8% short of the five-year average. Assuming normal 4Q14 weather, the storage deficit could swing to a surplus before YE14 amid surging U.S. dry gas production, which is up 2.7 Bcf/d y/y year-to-date.
Lowering Gas Price Forecast
We are lowering our long-term NYMEX natural gas price forecast 15% to $4.25/MMBtu from $5.00. The change causes us to lower our NAV estimates an average of 8% (Figure 1). We are also trimming our 4Q14 NYMEX gas forecast 11% to $4.25 from $4.75, which lowers our 4Q14 EPS/CFPS estimates an average of 6%/3% (7%/4% below Street consensus) (Figure 2). Our 2015 NYMEX gas price forecast remains $4.25.
The October NYMEX futures contract expired last Friday at $3.98. Our prior 4Q14 forecast of $4.75, which contemplated natural price support from record low storage levels last spring, implies an average price of $5.12 for November and December. After robust injections exceeded the five-year average storage build over the past 23 consecutive weeks, $5 gas in 4Q14 is unlikely barring a much colder-than-normal autumn.
Storage is on pace to finish the injection season (11/1/14) near 3.5 Tcf, approximately 300 Bcf or 8% short of the five-year average. Assuming normal 4Q14 weather, the storage deficit could swing to a surplus before YE14 amid surging U.S. dry gas production, which is up 2.7 Bcf/d y/y year-to-date.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group