Natural Gas - Preview by TPH

[dan_s]

From Tudor Pickering Holt 1/11/18 morning (before EIA storage report)

Natural gas storage preview – It’s gonna be a big one (HHUB $2.9/mcf) – “Bomb cyclone” weather conditions and production freeze-offs have Street estimates ahead of today’s storage print at potentially record-breaking levels. Estimates are averaging in draws of >(330)Bcf vs. 5-year norms of (172)Bcf after HDD data came in ~32% above normal. No draw has breached (300)Bcf in recent history, with the closest proxy occurring on 1/10/14 when a draw of (288) disappointed vs. Street estimates of (302). Storage levels as implied by Street estimated draws are plunging toward 5-year mins for the week after kicking off the winter season just a touch under normal levels. However, weather forecasts swinging fully in favor of warmer than normal temps across the US in the weeks ahead has HHUB lingering below $3/mcf. The gas storage / pricing relationship is beginning to closely resemble our New Year’s Resolutions – we keep dieting, but the scale just doesn’t seem to move.