Energy Prospectus

Working gas in storage was 1,001 Bcf as of Friday, March 7, 2014, according to EIA estimates. This represents a net decline of 195 Bcf from the previous week. Stocks were 958 Bcf less than last year at this time and 858 Bcf below the 5-year average of 1,859 Bcf. In the East Region, stocks were 395 Bcf below the 5-year average following net withdrawals of 95 Bcf. Stocks in the Producing Region were 335 Bcf below the 5-year average of 737 Bcf after a net withdrawal of 79 Bcf. Stocks in the West Region were 127 Bcf below the 5-year average after a net drawdown of 21 Bcf. At 1,001 Bcf, total working gas is below the 5-year historical range.

This looks very bullish to me. Storage is now all but certain to dip under 800 bcf by the end of March.

I see lots of "experts" saying that we will have no problem refilling storage this year. The only way I see that happening is if the weather is very mild this summer and there are no hurricanes in the Gulf of Mexico. What happens if all that ice on the Great Lakes keeps night time temps low and everyone in Chicago, Detroit, Cleveland, etc have to keep their furnaces on until June? What happens if we have a hot July & August in the South and all those gas fired peaking plants have to run day and night?

Anyone that thinks that natural gas storage will just refill quickly is nuts. An extra 3 billion cubic feet of gas is not just going to show up because we hope it does. "The future does not get better by hope, the future gets better by plan."
If storage dips below 800 bcf by the end of March, it is going to take a lot more gas to refill than we injected last year. Production increases in the Marcellus, Utica and Eagle Ford may not be enough to offset declining production in the Barnett, Fayetteville and Haynesville. The Haynesville is on steep decline.

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