Thursday, July 19, 2012

EIA: Storage +28 Bcf to 3.163 Tcf

The EIA working gas in storage report showed a 28 Bcf net increase, bringing the total gas in storage to 3.163 Tcf.  The weekly injection was 58% lower than last year (+67 Bcf) and 62% below the five year average (+74 Bcf).  With the lower injection, the current storage level is now 19.2% above last year (2.654 Tcf) and 17.5% above the five year average (2.619 Tcf).


Temperatures last week averaged 78.1 degrees, which was 0.6 degrees warmer than last year and 3.3 degrees warmer than average.

8 comments:

Bill Mendenhall said...

Robert, I'm not sure why this isn't getting more press. After all of the doom and gloom about the glut, the past 11 weeks have shown a huge change in direction. Several commentators are now saying the glut will be eliminated by year end.

Robert Hutchinson said...

One way or another we will have a clean slate come year end because it will come close to maxing out. And then we get to do this all over again next year! (Unless we have a cold winter...)

It probably won't be a real story until it gets back in the 10% range. Prices are inching up, but if excess supply is still being sucked up by utilities, the price likely is capped relative to the price of coal. It is probably range-bound until other sources of consumption pick up. THEN you've got a good story!

Bill Mendenhall said...

But, one possible differece next year could be the extreme reduction in rig count. Associated gas from liquids drilling doesn't appear to be resulting in continued increases in production, like we had last year, and what effect will the dramatic decrease in rigs have over the next year or so? At least it will be interesting!

Robert Hutchinson said...

We should also keep an eye on WTI oil prices. If they sag and drilling is not as robust as it has been of late, it's another reason for associated gas quantities to decline.

If things do improve for NG, the question remains, how long can the producers keep their hands out of the cookie jar (read: boost gas drilling)?

Bill Mendenhall said...

Keep up the good work Robert! We all appreciate your good work.

Robert Hutchinson said...

Thanks, Bill. And thanks for sending the articles.

RH

Anonymous said...

Lets not forget about the gas that is shut-in. Within a few days that gas can be on the market if the price rises. Also there are hundreds of wells that are drilled, but completion has been postponed due to low prices, companies already have sunk expenses into these wells and will be eager to complete these wells if the prices rise a little more.

Robert Hutchinson said...

We need a statistic to monitor completion crews like we do rig counts. That may be more indicative of new production coming to market.

With gas approaching $3/MMBtu, one wonders if a few producers aren't going to loosen the spigot on shut-in wells a bit to get some cash flow...