Working gas in storage was 2,684 Bcf as of Friday, February 1, 2013, according to EIA estimates. This represents a net decline of 118 Bcf from the previous week. Stocks were 226 Bcf less than last year at this time and 351 Bcf above the 5-year average of 2,333 Bcf.
I was hoping for a draw of over 130 bcf. I believe if NG storage falls to under 2,200 bcf by the end of March the price of natural gas will average over $3.00/mmbtu for the year. With ~9 more weeks of decline we should make it. The next two week's draws should be over 100 bcf. If gas in storage gets under 2,400 bcf by the end of February, then we have a decent shot at getting down to 2,100 bcf by the end of March, all it takes is one late winter storm. IMO that would be very encouraging for the gassers. Remember, we now use a lot more gas for power generation in the summer than we did just a couple years ago.
The seven day forecast actually looks fairly bullish for gas.
http://www.wunderground.com/ndfdimage/v ... mint&msg=6
Natural Gas Storage Report - Feb. 7
Natural Gas Storage Report - Feb. 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Feb. 7
From analyst report sent to me by one of our members.
End-Of-March Storage Outlook – With nearly two-thirds of this winter now in the
books, weighted temperatures have so far been ~6% warmer than normal but ~7%
colder than last winter, and thus storage ended last week at a 226 Bcf year-overyear
deficit. If temperatures for the rest of the winter are normal, then storage would
end March at ~1.9 Tcf although every 1% deviation through March would impact this
winter-ending storage forecast by ~20 Bcf. Thus, U.S. natural gas storage is unlikely
to approach last year’s record high ~2.5 Tcf at the end of March. The end of March
marks the end of the traditional storage withdrawal season and since storage is
typically refilled to “full” by the start of the following winter, end-of-March storage
essentially dictates the pace of injections during April through October. Thus, absent
significant shut-ins/curtailments (Encana and Chesapeake shut in up to 1.2 Bcf/d at
the peak in March last year) and without any drop in domestic production, the
effective “clearing mechanism” continues to be coal-to-gas switching which, in turn,
essentially sets the natural gas price relative to coal prices. Our 2013 composite
spot natural gas price forecast, which was set in September based on a normal
winter, remains $3.60/MMBtu. We will look to make any adjustments to this forecast
based on how the winter ends up and any other adjustments to our supply/demand
model as the winter comes to a close. But we point this out since Ultra Petroleum,
Chesapeake, Encana, Quicksilver, Cabot, Southwestern, Goodrich, Sandridge
and Devon among our coverage group are the most sensitive on bottom-line
E PS/CFPS estimates to any change in our natural gas price outlook
End-Of-March Storage Outlook – With nearly two-thirds of this winter now in the
books, weighted temperatures have so far been ~6% warmer than normal but ~7%
colder than last winter, and thus storage ended last week at a 226 Bcf year-overyear
deficit. If temperatures for the rest of the winter are normal, then storage would
end March at ~1.9 Tcf although every 1% deviation through March would impact this
winter-ending storage forecast by ~20 Bcf. Thus, U.S. natural gas storage is unlikely
to approach last year’s record high ~2.5 Tcf at the end of March. The end of March
marks the end of the traditional storage withdrawal season and since storage is
typically refilled to “full” by the start of the following winter, end-of-March storage
essentially dictates the pace of injections during April through October. Thus, absent
significant shut-ins/curtailments (Encana and Chesapeake shut in up to 1.2 Bcf/d at
the peak in March last year) and without any drop in domestic production, the
effective “clearing mechanism” continues to be coal-to-gas switching which, in turn,
essentially sets the natural gas price relative to coal prices. Our 2013 composite
spot natural gas price forecast, which was set in September based on a normal
winter, remains $3.60/MMBtu. We will look to make any adjustments to this forecast
based on how the winter ends up and any other adjustments to our supply/demand
model as the winter comes to a close. But we point this out since Ultra Petroleum,
Chesapeake, Encana, Quicksilver, Cabot, Southwestern, Goodrich, Sandridge
and Devon among our coverage group are the most sensitive on bottom-line
E PS/CFPS estimates to any change in our natural gas price outlook
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group