Energy Prospectus

The SOI has turned sharply negative. This means temperatures across the U.S. and Canada are going to turn much colder in about five days.

What is the SOI?

Go to http://www.weatherbell.com/premium/ and listen to the Jan 23 update to learn.

Beginning this Thursday, the weather in Chicago (the "bulls eye" for natural gas demand) turns colder. The overall pattern points to a much colder than normal February for the eastern half of the U.S. Cold will move deep into Texas and the South the first week of February.

Chicago Forecast: https://www.wunderground.com/us/il/chic ... 90.1.99999

Keep this in mind: If the amount of natural gas in U.S. storage is below the 5-year average at the end of March we have a good shot at seeing $4.00/MMBtu on the NYMEX strip for Q4. On January 13th U.S. natural gas in storage was 77 Bcf BELOW the 5-year average.

dan, joe has been counter noaa all winter and he is this time also.

http://www.cpc.ncep.noaa.gov/products/p ... /index.php

We will see won't we. Just remember that weather related demand is only a part of the natural gas market. Falling natural gas production and rising exports had a lot to do with the big draw from storage last week.

BTW Joe predicted the snow storm in the NE that is happening now, way before NOAA picked it up. He also was way ahead of them on the big storm that hit North Carolina a week ago.

I use Joe Bastardi as one source and so should you. FWIW the forecast maps on Joe's website are from other sources like NCEP and European forecasting services that are often much better than NOAA.

Now go to Weather Underground ( https://www.wunderground.com/ ) and check out the weather forecasts for key cities in the five states that rely the most on natural gas from storage (Illinois, Michigan, Ohio, Minn and Wis). Start with Chicago. Notice what happens after Wednesday.

Weather Underground's 10 day forecasts are fairly good, but no weather service is perfect.

I have been tracking U.S. natural gas storage closely for 37 weeks. During that period (259 days) exactly 900 BCF less gas has been added to storage than during the same 37 weeks a year before. 900/259 days = 3.475 Bcf per day.

That is a HUGE delta.

Go to http://www.americanoilman.com/ and click on Gas Storage to confirm.