Natural Gas Storage Report - October 16
Posted: Thu Oct 16, 2014 10:59 am
Working gas in storage was 3,299 Bcf as of Friday, October 10, 2014, according to EIA estimates. This represents a net increase of 94 Bcf from the previous week. Stocks were 344 Bcf less than last year at this time and 362 Bcf below the 5-year average of 3,661 Bcf.
The weekly builds will now start to drop as temperatures drop during the evenings and more people fire up the furnace.
My guess is that we have about 3,650 Bcf in storage when the draws begin mid-November. That means we will start heating season with ~200 Bcf less in storage than last year. If we get a significant cold wave in early December, I believe we will see $5.00 natural gas by Christmas.
Unless we have another very cold winter (like last year), the outlook for natural gas prices in 2015 is not good. There is a lot of gas out there. Industrial demand for gas does continue to drift higher and LNG exports should begin by Q4 2015. 2016 should be much better for the "gassers", but they may have to survive low prices from April - November next year. I will be taking a very hard look at each company's hedges.
The weekly builds will now start to drop as temperatures drop during the evenings and more people fire up the furnace.
My guess is that we have about 3,650 Bcf in storage when the draws begin mid-November. That means we will start heating season with ~200 Bcf less in storage than last year. If we get a significant cold wave in early December, I believe we will see $5.00 natural gas by Christmas.
Unless we have another very cold winter (like last year), the outlook for natural gas prices in 2015 is not good. There is a lot of gas out there. Industrial demand for gas does continue to drift higher and LNG exports should begin by Q4 2015. 2016 should be much better for the "gassers", but they may have to survive low prices from April - November next year. I will be taking a very hard look at each company's hedges.