Energy Prospectus

Working gas in storage was 1,055 Bcf as of Friday, May 2, 2014, according to EIA estimates. This represents a net increase of 74 Bcf from the previous week. Stocks were 797 Bcf less than last year at this time and 982 Bcf below the 5-year average of 2,037 Bcf.

IMO this is one more bullish report. There is now zero chance of storage getting to within 800 bcf of the five year average by the end of May. The five year average at the end of May is 2,351 bcf.

2,351 - 800 = 1,551

1,551 - 1,055 = 496

Storage would have to build by 124 bcf for four weeks in a row to reach 1,551. That has NEVER happened and it won't this year. In fact, in the last six years there has only been one four week period with builds over 100 bcf in a row. So, we are probably going to get to the end of May with storage levels ~900 bcf below the five year average.

It will take awhile for this to sink in, but there is now zero chance of storage getting back over 3,500 bcf before next winter begins. That is way too low for this country.

Don't worry too much about the current spot price. This is the time of year when gas demand is at the lowest of the year. Demand will pick up in June when heat and humidity spreads across the South.

Natural Gas storage:

The EIA reported a 74 Bcf build in the weekly storage report for the week ending 5/2/14, which was above the Bloomberg consensus expectation of a 71 Bcf build. This is only slightly above the 5 year average injection for this week of 72 Bcf. Many analysts view this figure as a continuation of an early injection season that has been strained to gather the pace needed to get to adequate Nov. 1 storage levels. Storage at 1,055 Bcf stands 982 Bcf or 48.2% below the 5-year average.

U.S. Crude Oil:

The Petroleum Status Report for the week ended 5/2/2014

U.S. Crude production averaged 8.350 mmbpd compared to 8.352 mmbpd in the prior week.

U.S. Crude production averaged 8.350 mmbpd compared to 7.369 mmbpd in the prior year (+1.0 mmbpd or 13% y/y).