Energy Prospectus

Working gas in storage was 2,709 Bcf as of Friday, June 9, 2017, according to EIA estimates. This represents a net increase of 78 Bcf from the previous week. Stocks were 322 Bcf less than last year at this time and 228 Bcf above the five-year average of 2,481 Bcf. At 2,709 Bcf, total working gas is within the five-year historical range.

The 5-year average for this week is an increase of 86 Bcf. Weekly increases in storage should drop steadily from mid-June until the end of August.
Go here and click on Gas Storage to confirm that injections will be declining: http://www.americanoilman.com/

Since mid-March (13 weeks) the difference between the gas in storage and the 5-year average has declined by 188 Bcf. FYI 13 week is ~25% of the year.

Over the next 13 weeks I predict that the gas storage level will move very close to the 5-year average and will drop below it before the next winter heating season begins.
> Gas needed for power generation is now ramping up Big Time.
> LNG exports will increase as Cheniere's Train #3 ramps up.
> U.S. gas production was down ~2.0 Bcfpd in the first five months of this year. Gas production is now increasing, but much slower than demand.

The concept to keep in mind is that we have massive natural gas reserves in the ground, but reserves are not "production capacity". In the near-term, demand will exceed our production capacity. We are going to have a much tighter gas and NGL market in Q4 2017 and Q1 2018 than we did a year ago.

Top Picks for more exposure to natural gas and NGLs are: AR, RRC, GPOR and EQT

Other Large-Caps in the Sweet 16 with lots of natural gas and NGL production: XEC, DVN, EOG, NFX, PXD

Smaller companies that produce a lot of gas and NGLs: CRZO, SM, SN, CRK, PQ, GDP

It is VERY IMPORTANT that you know the production mix of each company in your portfolio. You can find the production mix of each company at the bottom of the forecast/valuation models housed on our website.

From BP's Statistical Review of World Energy

Natural gas
•World natural gas consumption grew by 63 billion cubic metres (bcm) or 1.5%, slower than the 10-year average of 2.3%.
•EU gas consumption rose sharply by 30 bcm, or 7.1% - the fastest growth since 2010. Russia saw the largest drop in consumption of any country (-12 bcm).
•Global natural gas production increased by only 21 bcm, or 0.3%. Declining production in North America (-21 bcm) partially offset strong growth from Australia (19 bcm) and Iran (13 bcm).
•Gas trade grew by 4.8%, helped by 6.2% growth in LNG imports/exports.
•Most of the net growth in LNG exports came from Australia (19 bcm out of 21). US LNG exports rose from 0.7 bcm in 2015 to 4.4 bcm in 2016.

bcm = Billion Cubic Meters

Most of the slower growth in demand can be attributed to the warm winter of 2015-2016 in the northern hemisphere where 90% of humans live.

Coal consumption is being hammered by increasing power generation from wind, solar and natural gas.