Our thesis continues to be: average temperatures get swamped by supply-to the point that $2.00 gas is not just a short-seller's fantasy.
$2.672 down 4.1 cents.
Recent action:
Natural Gas Weekly Update
Working gas inventory just after winter's mid-point near five-year average
As of February 6, Lower 48 states natural gas working underground storage inventories are now only 11 billion cubic feet (Bcf), or 0.5%, less than their five-year average. After a record injection season (April-October), weekly working gas inventories reached a seasonal peak on November 7 of 3,611 Bcf, but were still 237 Bcf below the five-year average of 3,848 Bcf for that week.
Natural gas storage inventories have not exceeded their five-year average since November 22, 2013. Inventories, which ended the 2013-14 winter withdrawal season last March at a ten year record low of 837 Bcf, exceeded their year-ago inventory levels on December 12. While there had been several near-record withdrawals early this heating season, withdrawals so far this season have been significantly less than the record levels of last winter, and 16% less than the five-year average.
Increasing natural gas production has helped to displace some of the demand traditionally placed on storage during peak-use periods. Dry natural gas production has averaged 71.7 billion cubic feet per day (Bcf/d) since November 1, as reported by Bentek Energy, approximately 6.3 Bcf/d more than production for the same period last winter. This higher level of production is forecast to continue through the end of the heating season. EIA's Short Term Energy Outlook forecasts that production will average 72.7 Bcf/d, February through March, 5.0 Bcf/d higher than the same period in 2014....
...Storage
Storage inventories less than 1% below five-year average. The net withdrawal reported for the week ending February 6 was 160 Bcf, 18 Bcf lower than the five-year average net withdrawal for that week and 74 Bcf lower than last year's net withdrawal. Working gas inventories as of February 6 totaled 2,268 Bcf, 542 Bcf (31.4%) higher than last year at this time and 11 Bcf (0.5%) lower than the five-year (2010-14) average.
Storage withdrawals are lower than market expectations. Market expectations, on average, called for a pull of 168 Bcf. When the EIA storage report was released at 10:30 a.m. on February 12, the price for the March natural gas futures contract decreased 6¢, to $2.74/MMBtu, in trading on the Nymex. In the next hour, prices fell further, trading around $2.69/MMBtu....MUCH MORE
