Working gas in storage was 1,607 Bcf as of Friday, April 8, 2011, according to EIA estimates. This represents a net increase of 28 Bcf from the previous week. Stocks were 137 Bcf less than last year at this time and 10 Bcf above the 5-year average of 1,597 Bcf.
This is mildly bullish but I think it is because storage locations do not want to pay today's prices for gas when they know they will be able to get it cheap this summer.
Raymond James is now forecasting that NG will dip to $3.25 in the 3rd quarter. I'm not quite that bearish.
Natural Gas Storage Report - April 8
Natural Gas Storage Report - April 8
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - April 8
Bearish forecast for the gassers.
Summer Weather Outlook – While our models always assume normal weather going
forward, Citi’s commodities team recently issued a detailed summer outlook which,
based on customer weighted cooling degree days (CDDs), portends a cooler than
normal (ten-year average) season ahead with the risk to this forecast skewed to an
even cooler summer. According to the forecast, the core summer season (June-
August), is expected to be 5% cooler than average, and 17% cooler than last year,
which was the hottest summer on record. Based on the historical relationship between
natural gas demand and summer weather, the forecast implies ~200 Bcf less cooling
load demand than last summer. Meanwhile, the shoulder season (April and May), is
shaping up to be warmer than normal, with May expected to average 10% warmer than
the 10-year average, although 11% cooler than last year, which implies ~20 Bcf less
cooling load demand than last year. Meanwhile, the Atlantic Basin hurricane season is
expected to be very much in line with the historical norm (Citi’s forecast calls for 12
named storms, 6 hurricanes and 3 major hurricanes) and much less active than last
year (19 named storms, 12 hurricanes and 5 major hurricanes), which, similar to last
year, is likely to have minimal impact on Gulf Coast production this year.
Summer Weather Outlook – While our models always assume normal weather going
forward, Citi’s commodities team recently issued a detailed summer outlook which,
based on customer weighted cooling degree days (CDDs), portends a cooler than
normal (ten-year average) season ahead with the risk to this forecast skewed to an
even cooler summer. According to the forecast, the core summer season (June-
August), is expected to be 5% cooler than average, and 17% cooler than last year,
which was the hottest summer on record. Based on the historical relationship between
natural gas demand and summer weather, the forecast implies ~200 Bcf less cooling
load demand than last summer. Meanwhile, the shoulder season (April and May), is
shaping up to be warmer than normal, with May expected to average 10% warmer than
the 10-year average, although 11% cooler than last year, which implies ~20 Bcf less
cooling load demand than last year. Meanwhile, the Atlantic Basin hurricane season is
expected to be very much in line with the historical norm (Citi’s forecast calls for 12
named storms, 6 hurricanes and 3 major hurricanes) and much less active than last
year (19 named storms, 12 hurricanes and 5 major hurricanes), which, similar to last
year, is likely to have minimal impact on Gulf Coast production this year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group