Energy Prospectus

Watch the Saturday Summary weather report at https://www.weatherbell.com/premium/

A very cold start to April is bullish for natural gas, but it probably will not push HH gas prices back over $3.00.
What it will do is:
> Push end of season natural gas storage level over 700 Bcf below where it was at the end of last winter's heating season.
> There is now a good chance that storage is more than 750 Bcf below last year in mid-April.
...Last year's storage reports for the last week of March and first two weeks of April were +2 Bcf, +10 Bcf and +54 Bcf.
> Draws continuing into April will shorten the refill season. This is the most significant of the three.

If refilling storage starts off slow (lower than normal builds), then the utility company may get concerned and start bidding up the futures contracts. If summer heat moves in early, then we have a chance at seeing higher natural gas prices in July and August.

As I have posted here MANY TIMES, EIA is hell bent of convincing everyone that we have a HUGE SURPLUS of natural gas coming online "any day now". They have been sticking to this narrative for months, but natural gas storage reports sure aren't showing any surplus.

Time will tell, but either the surplus is not as big as EIA is saying it is or else demand is much larger. I think it is the demand side. Industrial users are happy to take all of the cheap gas the upstream companies are willing to sell them.

This was posted over on Investor Village this morning:

Permian oil and gas production ENNO data combined with EIA-914 monthly production report: Very bullish if confirmed!

There are more and more signs that the exhuberant forecasts for 2018 Permian Basin shale production are a bit of a fantasy.
Not only did we have the comments from 2 very well respected CEOs with huge experience in this domain, but the examination of the ENNO shale data combined with the EIA-914 monthly production report seems to indicate that indeed the excessive NGAS production from the Permian reservoir is going to limit oil production.
We should have confirmation within 1 or 2 months.
If indeed we have confirmation, it is going to be extremely bullish for WTI POO.

Dan - your link to spearsresearch.com relative to HCLP and PROPX in the Permian turned me on to the Spears Bros. Podcast. And as much as you would think that a podcast about oilfield analytics et. al. would be impossible to make interesting, they are actually funny in their own way and very instructional, informative, and interesting, at least for those who want to learn more about what’s going on in the oil field. I would say it’s worth a listen. I’m only through about 20 0f the 57+ episodes.

But to your point about gas in the Permian. The Spears brothers think one of the big stories of 2018 is the “bubblepoint” or the pressure point where gas first starts to come out of the oil gas solution. They also seem to imply that they are investigating the type curves of companies, and that due to the gas issue, the EUR estimates of many companies could be too high. They were teasing it, so they didn’t elaborate. So, the implication could be negative to the current value of some companies. At least this was my read, for right or wrong...