Natural Gas: Bearish Outlook

[dan_s]

Summary
Working gas in storage was 3,729 Bcf as of Friday, December 9, 2011, according to EIA estimates. This represents a net decline of 102 Bcf from the previous week. Stocks were 154 Bcf higher than last year at this time and 347 Bcf above the 5-year average of 3,382 Bcf.

Thoughts from TPH:
Gas Storage Recap ($3.13/mcf) – Neutral. 102bcf withdraw well below
seasonal norms ~150bcf and 164bcf y-ago on milder than normal weather. We call
this neutral as weather adjusted this week’s number was less than 1bcf/day
over-supplied compared to a trailing 4-week average of 3+bcf/day oversupplied
(this is why we look at 4-wk trailing averages). Current record storage of
3,279bcf is 507bcf (+16%) above the 10-yr norm and 100bcf (+2%) above prior max
levels.

We will stay heavily weighted to oil. - Dan