From EIA website: Working gas in storage was 2,083 Bcf as of Friday, March 1, 2013, according to EIA estimates. This represents a net decline of 146 Bcf from the previous week. Stocks were 361 Bcf less than last year at this time and 269 Bcf above the 5-year average of 1,814 Bcf.
IMO this is VERY BULLISH for natural gas prices. NG is up $0.12/mmbtu as I write this.
There is now a very good chance that storage will dip below 1,900 bcf by the end of March. We should see another triple digit draw next week. A month ago my HOPE was that storage would end up below 2,000 bcf.
This means there is little chance that storage will fill before next winter's heating season. We have a very good chance of seeing NG prices over $4.00/mcf in the 4th quarter.
Natural Gas Storage Report - March 7
Natural Gas Storage Report - March 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - March 7
Nat Gas bulls got what they were hoping for today; an inventory miss on the upside.
The weekly Nat Gas withdrawal came in at 146 BCF versus the industry consensus of 134 BCF. The market has known for over a week and had already priced in the fact that the report was going to be bullish versus both last year and the five year average. What was not priced into the market was a larger than expected withdrawal... which is exactly what occurred sending the spot futures contract back above the $3.50/mmbtu range resistance level.
After falling back below this key $3.50/mmbtu technical range for the last several days the market has now likely settled above this level and it will once again a technical support level. For now we are back into a higher $3.50/mmbtu to $3.66/mmbtu trading range... assuming it holds. Recall we have failed above this level back during the second half of January and we failed earlier this week. As such I would like to see several settles above the $3.50/mmbtu level to gain confidence that the breakout may be real this time.
We can expect to see another triple digit draw from storage next week.
The latest NOAA six to ten day and eight to fourteen day forecasts remain supportive for above normal levels of Nat Gas heating related demand into the third week of March or just about the start of spring. Whether the colder temperatures will result in a much higher inventory withdrawal over the aforementioned timeframe is not yet a certainty.
Thursday's EIA report was bullish across the board and from all viewpoints. The report showed a net withdrawal that was above the expectations as well as above both last year and the five year average net withdrawal for the same period. Thus the number was also bullish based on a comparison to the historical data. The 146 BCF withdrawal (above normal for this time of the year) was above the market consensus calling for a withdrawal of around 134 BCF.
The weekly Nat Gas withdrawal came in at 146 BCF versus the industry consensus of 134 BCF. The market has known for over a week and had already priced in the fact that the report was going to be bullish versus both last year and the five year average. What was not priced into the market was a larger than expected withdrawal... which is exactly what occurred sending the spot futures contract back above the $3.50/mmbtu range resistance level.
After falling back below this key $3.50/mmbtu technical range for the last several days the market has now likely settled above this level and it will once again a technical support level. For now we are back into a higher $3.50/mmbtu to $3.66/mmbtu trading range... assuming it holds. Recall we have failed above this level back during the second half of January and we failed earlier this week. As such I would like to see several settles above the $3.50/mmbtu level to gain confidence that the breakout may be real this time.
We can expect to see another triple digit draw from storage next week.
The latest NOAA six to ten day and eight to fourteen day forecasts remain supportive for above normal levels of Nat Gas heating related demand into the third week of March or just about the start of spring. Whether the colder temperatures will result in a much higher inventory withdrawal over the aforementioned timeframe is not yet a certainty.
Thursday's EIA report was bullish across the board and from all viewpoints. The report showed a net withdrawal that was above the expectations as well as above both last year and the five year average net withdrawal for the same period. Thus the number was also bullish based on a comparison to the historical data. The 146 BCF withdrawal (above normal for this time of the year) was above the market consensus calling for a withdrawal of around 134 BCF.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group