EIA - Weekly Natural Gas Storage Report - April 15

[dan_s]

Natural gas in storage was 2,097 Bcf as of Friday, April 10, 2020, according to the EIA. This represents a net increase of 73 Bcf from the previous week. Expectations were for a 66 Bcf build. Stocks were 876 Bcf higher than last year at this time and 370 Bcf above the five-year average of 1,727 Bcf. At 2,097 Bcf, total working gas is within the five-year historical range.

Much tighter ngas market before next winter arrives= $2.00 gas by June, $2.50 by Oct & $3.00 by Christmas.
See: https://www.cmegroup.com/trading/energy ... l-gas.html

[mikelp]

hey Dan
I know this is difficult to predict,
so I'm asking for your gut feeling here,
do you think natgas or crude oil prices will do better in 2020?
my bet would be on natgas, looking at futures and the economy uncertainties with Covid-19

tia

[dan_s]

As I've been saying for several weeks in my weekly podcasts, the outlook for natural gas is much better in the 2nd half of this year. The primary reason is that there is going to be a big decline in associated gas coming from shale wells drilled for oil. EIA is now forecasting a 7 Bcfpd decline in U.S. natural gas production from December, 2019 to December, 2020. I think it might be more than that as well completions are falling rapidly.

I like RRC, GDP, and CRK. XEC also produces a lot of gas.

That said, WTI oil price must improve in 2nd half of 2020. If it doesn't, this world will be undersupplied on oil in 2021.
Take a look at the NYMEX strip for WTI here: https://www.cmegroup.com/trading/energy ... crude.html

The NYMEX Strip is not a forecast, but it does tell you the direction of oil and gas prices in the minds of the traders. Everyone knows that the current oil price is unsustainable.

[mikelp]

Dan,
what's your call on EQT?
large operator in the Marcellus and Utica bains

tia

[dan_s]

I don't follow EQT, but it looks like the Wall Street Gang has come around to my idea that natural gas price could be a lot higher in six months. RRC is my favorite in the Marcellus/Utica play.

I like GDP and CRK in the Haynesville.

Take a look at GPOR today. Looks like someone is building a sizable position and might make a takeover bid.