Energy Prospectus

Working gas in storage was 2,252 Bcf as of Friday, May 31, 2013, according to EIA estimates. This represents a net increase of 111 Bcf from the previous week. Stocks were 616 Bcf less than last year at this time and 69 Bcf below the 5-year average of 2,321 Bcf.

This report is obviously bearish for natural gas prices, but we should start to see lower injections next week as demand for power generation will be picking up as the summer heat spreads. Front month NYMEX price may pull back to the $3.50 - $3.70 range until we see more demand.

There will be no fundamental support from the first named storm of the year which formed overnight. Tropical Strom Andrea is now on a path taking it from the Gulf of Mexico northeastward toward northern Florida. From there it is projected to take a path along the east coast of the US before heading out to sea early next week. There are no signs suggesting that Andrea is going to impact Nat Gas or oil operations in the Gulf of Mexico and not likely to interrupt refinery operations on the east coast based on the current path and projected intensity of the storm.

The latest NOAA six to ten day and eight to fourteen day weather forecasts remains neutral at best with the area of above normal temperatures on the west coast moving to the southwest while the rest of the country is moving toward normal temperatures through June 19th. The current forecast suggests that there will not likely be any surge in Nat Gas weather related demand throughout the forecast period.