Energy Prospectus

Heads up.

The end of January is included in week four of Celsius Energy's site.

http://celsiusenergy.blogspot.com/p/week4.html

The storage draw forecast is dropping. I keeep a spread sheet for temperature forecasts in Cleveland. I have been tracking Jan 31, The forecast for Jan 31 jumped big time this morning. Based on current data - January is going to be a mlld month. By the end of January - February will not matter.

Just a heads up.

Accu Weather Jan 31 Cleveland
http://www.accuweather.com/en/us/clevel ... 127?day=26

Wednesday, January 04, 2017 29/27
Thursday, January 05, 2017 29/27
Friday, January 06, 2017 29/27
Saturday, January 07, 2017 45/34

Just keep in mind that ignoring the weather U.S. gas production is down ~2.0 Bcf per day and demand is expected to increase by 3.5 Bcf per day in 2017.

It is not all about the weather for gas. Read the RBN forecasts we sent out early this week.

Raymond James comments on why the U.S. gas market will be much tighter in 2017.

"Turning to 2017, we reaffirm our full-year Henry Hub forecast of $3.25, which would be the best year since 2014. As we detailed two weeks ago, exports of gas to Mexico are an increasingly important but underappreciated driver for U.S. gas demand, and should tighten the market by 0.8 Bcf/d year-over-year. Further, LNG exports should increase by 0.6 Bcf/d, while imports from Canada should decrease by 0.4 Bcf/d. While weather is always a black box, it is reasonable to assume normalization following last year’s El Niño, tightening the market by 1.1 Bcf/d. We believe the market will require higher gas prices to drive 1.4 Bcf/d of 2017 coal-to-gas switching in order to reach normal storage levels."

VERY IMPORTANT: U.S. natural gas production peaked in March, 2015 at 78.7 Bcf per day. Production declined to 76.9 Bcf per day by September, 2017. Per the EIA's Drilling Productivity Report, U.S. gas production continued to decline in Q4 and has recently begun to creep back up. Production during the first half of 2017 should be at least a Bcf per day lower than it was during the first half of 2016. Plus, Canadian production has also declined.

By 2020 the U.S. will be exporting 12 to 14 Bcf per day of natural gas. 8 to 10 as LNG and over 4 Bcf via pipeline to Mexico.

Today the U.S. gas market is ~83 Bcf per day. By 2020 the total market will be over 100 Bcf per day.