Natural Gas Storage Report - October 25

[dan_s]

Working gas in storage was 3,843 Bcf as of Friday, October 19, 2012, according to EIA estimates. This represents a net increase of 67 Bcf from the previous week. Stocks were 153 Bcf higher than last year at this time and 251 Bcf above the 5-year average of 3,592 Bcf.

The NYMEX strip for natural gas is flat today as this report is about what everyone expected.

My take is that if gas in storage gets within 200 Bcf of the 5-year average we will see the price move over $4/mcf. If gas in storage gets within the 5-year average, which will take a cold start to winter, then we see gas move over $5/mcf.

I continue to use $3.50/mcf in all of my forecast models but that is starting to look very conservative.

CRZO is a good way to get more gas exposure. I was very pleased to see their production report today. They are ramping up in the Eagle Ford but they still have a lot of Barnett Shale gas and big gas potential in the Marcellus.