Natural gas - Going to get a nice boost next week

[dan_s]

Go to http://www.weatherbell.com/


First watch the 1/9 update and then watch the 1/12 update.

Dr. Joe Bastardi is the best long-range weather forecaster that I know. He has been saying for months now that after a warm December we would see a MAJOR change in the U.S. to much colder weather in the first quarter. Most energy sector analyst are still expecting this "El Nino Winter" to remain warmer than normal.

Based on his forecast, I believe we will see several weekly draws from natural gas storage over 200 BCF (mid-Jan to mid-Feb), which should firm up natural gas prices.

Propane prices should also get a boost from this.

The home heating season in the U.S. ends during the first half of April each year. Natural gas storage levels are normally down to 1,600 to 1,800 Bcf by April 1 (keep in mind that "Base Load" is around 1,000 Bcf). I have seen some analyst saying they expect natural gas storage to be as high as 3,000 Bcf at the end of March. Obviously, they believed all of the BS about the Super El Nino winter. It would have to be an unbelievably warm first quarter in the eastern U.S. for that to happen.

On 1/1/2016 natural gas in U.S. storage was 3,643 Bcf. Based on Joe's weather update, we can expect to see storage drop to around 2,800 Bcf by 2/1/2016. If we end the heating season with less than 2,000 Bcf in storage it should be good news for the "gassers".

Keep in mind that we now have a lot more natural gas fired power plants that run all year. They have replaced coal fired power plants.

[dan_s]

Take a look at this weather forecast map: http://www.wunderground.com/ndfdimage/v ... &region=us

It is VERY BULLISH for natural gas. We could see a 250 Bcf decline in natural gas storage levels for that week.