Energy Prospectus

The weather pattern is changing. Even NCEP is now forecasting a cold start to January in the U.S.

Per Dr. Joe Bastardi's daily update ( https://www.weatherbell.com/premium/ ) the eastern 2/3rds of the U.S. may see temps 8 to 10 degrees below normal from mid-January to mid-February. BTW "normal" is still very cold during that time period.

Natural gas in storage will be ~2,500 Bcf on January 1, 2019. Just normal winter weather in January in the eastern 2/3rds of the U.S. will require draws of more than a TCF from storage next month.

Storage "Base Load" is ~1,000 Bcf. So, if we get to 1/31/2019 with ~1,500 Bcf in storage there will not be enough "working gas" to safely make it through February, much less a cold March. Last winter (considered a normal winter), over 2,000 Bcf was draw from storage during the first quarter.

This looks like a repeat of the 2013-2014 winter.

In the first week of April, 2014 natural gas storage was draw down to 827 Bcf. In the first quarter of 2014, the price of gas peaked at $5.43/MMBtu and stayed over $4.00 the entire year because it took the entire year to refill storage back to a safe level heading into the next winter. Refilling storage is not an option and it can be a significant part of the annual demand.

Check out our recent profiles on CRK and GDP that can be found under the Small-Cap tab on our website. These small-cap "gassers" have a lot of upside if gas just stays over $3.00 all year.

Natural gas price history: https://www.macrotrends.net/2478/natura ... ical-chart

Poland signs 20-year LNG deal with U.S. company. Poland’s state-owned natural gas company inked a 20-year agreement to import LNG from the U.S., a business decision that also affects geopolitics in Europe. Polish Oil & Gas Company, or PGNiG, signed a deal with Sempra Energy’s (NYSE: SRE) Port Arthur LNG facility, importing 2 million metric tons of LNG per year. The project has not received an FID yet, but the agreement with Poland could move it forward. The U.S. government has long pushed LNG exports as a vehicle to pry away Eastern Europe from dependence on Russia.

U.S. southwest explores gas pipeline. The governors of Arizona, New Mexico and Mexico’s state of Sonora signed an agreement on Wednesday to explore a potential natural gas pipeline to move Permian gas to the Gulf of California. The non-binding agreement encourages the states to explore and promote investment for a pipeline and possible LNG export terminal in the Gulf. “Asia’s burgeoning demand, New Mexico’s abundant supply, and Arizona and Sonora’s strategic location and transport networks all combine to present an opportunity for continued regional growth,” the agreement says.