Friday, February 12, 2010

Storage Down 191 Bcf

The EIA weekly natural gas in storage report, delayed one day because of terrible weather that shut the government down for a few days, showed a 191 Bcf decrease to 2.215 Tcf.  This compares favorably (but not exceedingly so) to the change last year (-164 Bcf) and the five year average (-155 Bcf), but it was not enough to narrow the spread between the current year and the historical measures too much. 

Overall, the weekly withdrawal represented a 7.9% decrease in storage, with the East Region (-9.3%) withdrawing the most on a percentage basis and the West Region (-4.2%) withdrawing the least.

With the big storms and cold weather this week, I'm sure traders are looking for an even bigger withdrawal next week.


Anonymous said...

Yes and it is interesting to note that for the second week of February the withdrawal was -44 Bcf last year and -129 Bcf the 5year average.

Robert Hutchinson said...

I'm hoping for a stomping next week.

Bill Mendenhall said...

The real unknown here seems to be whether production is actually falling off (due to the reduced rig count over the past year). I realize the shale wells have a steep first year decline curve, but are we actually seeing a drop in production?

Robert Hutchinson said...


One thing that might complicate that answer is how much wells were choked back in the second half of last year as the prices declined.

My sense from several sources is that fewer shale wells (especially in their first year or two) at half the rig count produce much more than a regular batch of wells with a fat rig count. But since about half the gas produced comes from wells three years or younger, the production/rig count question might take a little longer to answer.