Weather
Posted: Sun Jul 13, 2014 1:48 pm
http://www.investorvillage.com/smbd.asp ... d=13995208
Check out the link above and watch Joe Bastardi's video. He is now predicting a cooler than normal July & August (bearish for natural gas prices), a warmer than normal September (bullish for gas) and another very cold winter for North America. An early start to next winter could be very bullish for gas prices.
It looks like gas in storage will be around 3,400 BCF by mid-November, when the next heating season begins. That would be more than 400 BCF below were it was a year ago. If so, that is bullish for gas prices and we could see the price spike if we get a colder than normal December. Joe is predicting the real cold weather in January.
One thing that keeps me cautious about gas prices is that the midstream companies have built a lot of new gathering, processing and pipeline facilities in the Marcellus Shale area in PA. This means there will be more deliverability in the NE, so maybe the lower storage levels in the area won't be as big of a deal.
I am using $4.50/mcf in all of my forecast models. We could see a spike in the natural gas prices (like we did last January), but the U.S. has HUGE gas reserves so I never see gas getting anywhere close to the 6:1 ratio to oil again. My "hope" is that gas prices settle in the $5.00 to $6.00 range. This would be good for our industry and good for our country. Natural gas is our cleanest and most abundant supply of energy. It give the U.S. and Canada a significant advantage over the rest of the world. We just need to do a better job of using it.
Check out the link above and watch Joe Bastardi's video. He is now predicting a cooler than normal July & August (bearish for natural gas prices), a warmer than normal September (bullish for gas) and another very cold winter for North America. An early start to next winter could be very bullish for gas prices.
It looks like gas in storage will be around 3,400 BCF by mid-November, when the next heating season begins. That would be more than 400 BCF below were it was a year ago. If so, that is bullish for gas prices and we could see the price spike if we get a colder than normal December. Joe is predicting the real cold weather in January.
One thing that keeps me cautious about gas prices is that the midstream companies have built a lot of new gathering, processing and pipeline facilities in the Marcellus Shale area in PA. This means there will be more deliverability in the NE, so maybe the lower storage levels in the area won't be as big of a deal.
I am using $4.50/mcf in all of my forecast models. We could see a spike in the natural gas prices (like we did last January), but the U.S. has HUGE gas reserves so I never see gas getting anywhere close to the 6:1 ratio to oil again. My "hope" is that gas prices settle in the $5.00 to $6.00 range. This would be good for our industry and good for our country. Natural gas is our cleanest and most abundant supply of energy. It give the U.S. and Canada a significant advantage over the rest of the world. We just need to do a better job of using it.