Where's Dan?

[dan_s]

Speaking at the Hess Club today at noon. Topic: Why Natural Gas and NGL prices are going a lot higher this winter?

[bearcatbob]

While I hope you are correct - the weekly negative injection deltas are getting smaller. It the premise of rising demand and decreasing supply was correct the deltas should be increasing. Me thinks the very warm summer is the reason the deltas were in our favor. I fear supply is far far far far more resilient than expected.

Bob

[dan_s]

Injections always go up in the Fall. See: http://www.americanoilman.com/ Click on "Gas Storage".

Over the last 19 weeks, injections have been a total of 539 Bcf below the 5-year average. That is more than 28 Bcf per week. That is way too large to just be the result of weather.

Domestic production is falling
Exports are increasing
Industrial demand is increasing
Gas used for power generation is increasing.
Gas from Canada is falling

It is too late in the year for the upstream companies to do anything to reverse falling production before winter heating season arrives.

Look at slide 9 and you can see that EIA is forecasting U.S. gas production to decline by 0.3 Bcfpd from September to October. Note that the Barnett Shale and Fayetteville Shale are not shown on that slide. They are both on steady decline.