Natural Gas

dan_s · Post by **dan_s** » Sat Jun 02, 2012 10:45 am

Working gas in storage was 2,815 Bcf as of Friday, May 25, 2012, according to EIA estimates. This represents a net increase of 71 Bcf from the previous week. Stocks were 732 Bcf higher than last year at this time and 724 Bcf above the 5-year average of 2,091 Bcf.

Natural gas supply/demand fundamentals remain weak and will get worse when gas in storage approaches capacity. Total storage capacity is around 4,200 bcf.

More gas will be used for power generation this summer. Fewer and fewer dry gas wells are being drilled. However, more Bakken and Eagle Ford wells (drilled for liquids) are now being tied into gas sales.

IMO there is a good chance NG prices will test the lows early Q3. An early onset of winter in November is our best chance of NG prices recovering back to over $3/mcf.