Natural Gas Storage Report - August 11

[dan_s]

Working gas in storage was 3,317 Bcf as of Friday, August 5, 2016, according to EIA estimates. This represents a net increase of 29 Bcf from the previous week. Stocks were 361 Bcf higher than last year at this time and 440 Bcf above the five-year average of 2,877 Bcf. At 3,317 Bcf, total working gas is above the five-year historical range.

The 29 Bcf increase compares to the 5-year average for this week of 57 Bcf.

Over the last 14 weeks the gap to the 5-year average has decreased by 398 Bcf.

There are 14 weeks remaining in "Refill Season". By the time the winter heating season arrives, storage levels should be very close to the 5-year average. If that happens, I expect the front month NYMEX contract to be trading at over $3.50/MMBtu in December. The January NYMEX contract, which will be the front month in December, is currently trading at $3.22/MMBtu.

[bearcatbob]

http://www.investorvillage.com/smbd.asp ... d=16260555

[bearcatbob]

If temperature is a factor in NG demand this year has to be the ultimate in temperature driven demand. Here in NE Ohio every day has been 90F plus. It has become very tiring as the extended duration of this heat is special. 3 golf rounds this week in this environment were especially challenging.

Sadly, the NG price has sagged and seems to be ignoring this heat wave.

Bob

[dan_s]

The gas price you see quoted daily is the front month NYMEX contract. We have plenty of gas in storage today, so their is no pressure on the utilities to pay up for gas to be delivered in September.

Go here: http://www.cmegroup.com/trading/energy/ ... l-gas.html

Take a look at strip prices for the first three months of 2017. If the storage level moves close to the 5-year average by the end of October, I think we'll see Q12017 gas trading for more than $3.50/MMBtu and maybe over $4.00.

Canada will have less gas to send us this winter and the U.S. is exporting a lot more gas this year.