Natural gas in storage needs to get down to around 2,200 bcf by the end of March in order for us to avoid a repeat of last year's low natural gas prices and average $3.50/mmbtu (the price I am using in my forecast models).
It is all about the weather at this point. Right now the next couple weeks look promising. See the map at this link: http://www.wunderground.com/ndfdimage/v ... mint&msg=6
Working gas in storage was 3,316 Bcf as of Friday, January 4, 2013, according to EIA estimates. Last winter ended with around 2,700 bcf in storage, the highest season ending level ever.
Here are my predictions:
If the storage level at the end of the heating season is X then the average NG price will be Y.
2,000 bcf = $4.00/mcf
2,200 bcf = $3.50/mcf
2,400 bcf = $3.00/mcf
2,600 bcf = $2.50/mcf < I see little risk of this happening.
The good news is that the U.S. is definitely using more gas for power generation and industrial uses (direct energy source or feedstock for manufacturing). Supply has declined but leveling off, even with the lower rig count since a lot of "associated gas" in the shale plays is being tied in. There appears to be little risk of gas going below $2.00/mcf like it did last summer.
The oil price is holding up quite well as the global supply/demand is much tighter than anticipated, despite increasing U.S. production. WTI is also moving toward Brent as the first steps to reduce the glut in Cushing have been taken.
Why has the Keystone XL Pipeline not been approved? It means more jobs, more revenues for state, local and federal governments and a more secure supply of energy from our neighbors in Canada. FWIW to all Environmentalist > transporting crude oil by truck and rail is a lot more dangerous than by pipeline. When will Washington to the "right thing" instead of what pleases the groups that donate to the campaign?
January 16 Blog
January 16 Blog
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: January 16 Blog
keystone has not been approved because obama does not want to help the economy. he doesn't see a spending problem.
he wants the economy to keep dragging hopeing it will create more chaos that he can benefit from.
he wants the economy to keep dragging hopeing it will create more chaos that he can benefit from.
Re: January 16 Blog
while i think this would be an extreme not likely to happen. dictators usually come to power under conditions of chaos.
look at what he s trying to do with the chaos from the newtown tragedy.
the now mayor of chicago said while he was obama's chief "never let a crisis go to waste."
look what fdr did with the chaos of the great depression.
and hey look how obama grew the government after the 2008/9 financial crisis.
look at what he s trying to do with the chaos from the newtown tragedy.
the now mayor of chicago said while he was obama's chief "never let a crisis go to waste."
look what fdr did with the chaos of the great depression.
and hey look how obama grew the government after the 2008/9 financial crisis.
Re: January 16 Blog
It sure seems like Obama is comfortable moving from cliff, to cliff, to cliff,..................................
One sure sign of an organization with poor leadership is when they are in constant "Crisis Mode".
Personally, I think there is plenty of blame to go around. The Senate is a disgrace and the House isn't much better. I saw a poll yesterday that said 83% of Americans now agree the Federal Government is too big and needs to cut spending. The other 17% must be on drugs or they live in Washington, DC.
One sure sign of an organization with poor leadership is when they are in constant "Crisis Mode".
Personally, I think there is plenty of blame to go around. The Senate is a disgrace and the House isn't much better. I saw a poll yesterday that said 83% of Americans now agree the Federal Government is too big and needs to cut spending. The other 17% must be on drugs or they live in Washington, DC.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group