Energy Prospectus

Working gas in storage was 2,530 Bcf as of Friday, January 10, 2014, according to EIA estimates. This represents a net decline of 287 Bcf from the previous week. Stocks were 659 Bcf less than last year at this time and 443 Bcf below the 5-year average of 2,973 Bcf. In the East Region, stocks were 292 Bcf below the 5-year average following net withdrawals of 149 Bcf. Stocks in the Producing Region were 104 Bcf below the 5-year average of 1,016 Bcf after a net withdrawal of 107 Bcf. Stocks in the West Region were 46 Bcf below the 5-year average after a net drawdown of 31 Bcf. At 2,530 Bcf, total working gas is below the 5-year historical range.

I think this is a new record draw from storage.

The last sentence says it all. My charts go back to 2009 and the previous low for this date was 2,736 bcf back in 2009. We have a lot more homes heated by gas today.

In the last six years, the lowest level of Ngas in storage was 1,607 bcf back on 4-8-2011.

Today, there is a very good chance we see storage dip below 1,500 bcf by the end of March. If that happens, natural gas prices should stay over $4.00/mcf through the Shoulder Season.

This is definitely a nice revenue boost for several of our portfolio companies.

From this point on in the heating season, the 5-year average draw from storage is 1,230 bcf.

2,530 - 1,230 = 1,300 bcf

If storage levels get anywhere close to that level, it will be VERY BULLISH for gas prices.