Monday, May 2, 2016

Natural Gas Prices Collapse on Mild Weather Forecast

Front month natural gas prices fell more than 13 cents to $2.04 today as the weather forecast was revised milder, particularly in the eastern half of the US.

The  6- 10 Day Forecast:

                       PREVIOUS                             CURRENT

The 8 - 14 Day Forecast:

                       PREVIOUS                             CURRENT

Cushing Crude Oil Inventory Swells, WTI Down

West Texas Intermediate fell by more than $1 today as a report indicated that Cushing, OK commercial crude inventories rose more than expected.

The EIA reported Cushing Inventories at 66.05 million barrels as of April 22nd, that's 1.44 million below the all time record of 67.49 million reported as of March 11th.

Saturday, April 30, 2016

Mexico Oil and Gas Production Declines Continue in March

Pemex reported March production this week, confirming that ongoing promises of a recovery in output are still unrealized.  Liquids (85% oil, 15% NGL) were down to their lowest level ever, and natural gas output logged a sixth month of sharp declines, down almost 1/2 a BCFD since September.  This corresponds with increased imports from the US over the same period.  

Friday, April 29, 2016

Oil Rig Count Falls by 11, Gas Rigs Also Down 1

It seems that drilling capital is running out, as 11 more oil rigs were idled last week, and one more of the remaining 88 gas rigs was laid down.

Last year there were still 679 oil rigs and 222 gas rigs operating.

How long before completions, and then production, begin to drop below replacement rate?

Thursday, April 28, 2016

Natural Gas Storage Build +73 BCF, Above Expectation

More gas was added to underground storage this week than was expected, making it more difficult to trim inventories by the end of injection season.  A production plateau isn't proving sufficient to reduce inventory surplus, in the absence of favorable weather during the shoulder season.  Power burn demand is also below expectation, in part due to low coal prices, low economic growth, and the rise of renewables.  Prices were pressured back below $2 for the front month after the EIA release.

Storage levels held at +832 BCF above the 5 year average, concentrated in the south central EIA region.