Natural Gas: Supply/Demand Balance Is Not Suggesting Record Injections In The Coming Weeks
From RBN Energy,
Sun, 05/04/2014 - 21:58:
Highlights of the Natural Gas Summary and Outlook for May 2 2014 follow. The full report is available at the link below.
Natural Gas Summary and Outlook
- Price Action: June prices rose 1.6 cents (0.3%) to $4.647 on a 20.4 cent range.
- Price Outlook: Prices did establish a new high
despite a slightly larger than expected EIA storage report. The market
has risen 4 consecutive weeks. Since 2000, 37 weeks have ended at
exactly 4 weeks higher with 17 ending at 5. Considering prices and
expectations for increasing injections, a new low seems most likely
despite a still bullish fundamental outlook. The CFTC data for April 27
revealed a rather substantial drop in the managed money net long
position. Total open interest also fell, but the net result was a
sizable reduction in the position on a percentage basis. Total open
interest fell to 4.05 million contracts. CME futures open interest was
barely lower at 1.09 million contracts as of May 1. Open interest had
fallen to just 1.08 million on April 28.
- Weekly Storage: US working gas storage for the week
ending April 25 indicated a build of 82 bcf. Current inventories of 981
bcf fall 796 bcf (44.8%) below last year and 974 bcf (49.8%) behind the
5 year average.
- Storage Outlook: The storage deficit continues to
dwindle, but at a rather tepid pace. The deficit is currently projected
to contract only marginally in May as the supply/demand balance is
simply not suggesting record injections in the coming weeks. At the same
time, 2013 injections were above average, thus making storage
comparisons a bit more difficult. The weekly injections have yet to meet
or exceed the 5 year weekly maximum. If injections match the 5 year
maximum, 2,503 bcf will added to storage facilities and lift inventories
to 3,484 bcf. This week needs to equal an 88 bcf injection to match the
5 year maximum. Injections must equal 128% of the 5 year average to
reach 3,400 bcf by early November and for this week must equal 93 bcf.
- Supply Trends: Total supply was unchanged at 70.1
bcf/d. US production slipped, but was offset by higher Canadian imports
and lower Mexican exports. LNG imports were unchanged. The US Baker
Hughes rig count fell 7 to 1,854 with oil activity slipping while
natural gas was unchanged. The Canadian rig count dropped 5 to 163 as
the normal seasonal decline remains in place. Thus, the total North
American rig count fell 12 to 2,017 and now surpasses last year by 132....MORE
Front futures $4.686, we still prefer the equities in ETF form, see FCG-$22.31- or the triple levered GASL-$48.56- for example. From FinViz:
