MatterhornEnergy's  Instablog

MatterhornEnergy
Send Message
Matterhorn Energy provides natural gas fundamental analytic services to trading and commercial organizations.
My blog:
  • Matterhorn Energy Natural Gas Storage Forecast +34 BCF (UNG, GAZ) 1 comment
    Apr 17, 2012 12:29 AM | about stocks: UNG, GAZ, KOLD, BOIL

    The Matterhorn Energy Weekly EIA Natural Gas Storage Forecast for gas week 4/12/12 is +34 BCF.

    Last week's +18 BCF (adjusted for the reclassifications) came in at 5.25 BCF/d tight to our 2011 model, as the market's balances reverted to the range of the 4 week average. This week, however, we see significant loosening in balances with our +34 BCF forecast. If the EIA prints a number in line with our expectations, we would see the market as loosening 3.25 BCF/d on a week over week basis.

    Our forecast of +34 BCF this week comes primarily from our scrape models, and is qualitatively defended by the recent observations in HDDs not proving to generate any significant heating demand. While our demand model came in at +21 after our adjustments for the lessening Residential/Commercial sector demand, we still believe the model is over-estimating the demand from the residual HDDs as this outright bearish winter came to a close.

    COAL SWITCH SETS A NEW HIGH

    The reference week set a new 7 day weather adjusted power burn record against our 2011 baseline. While coming in nominally lower than the previous week, burns were about 0.25 BCF/d stronger on a weather adjusted basis than the prior week.

    (click to enlarge)

    As the market waits for summer weather to show up, our forecast and actual burns continue to climb. We anticipate burns will continue to pickup strength as overnight loads allow for it.

    Below is our assessment of where current coal to gas economics predict nuclear adjusted switching should be on a rolling two week basis.

    (click to enlarge)

    The red dotted line is our model prediction. Orange bars are actual switch.

    WEEKLY US DRY GAS PRODUCTION ASSESSMENT

    US Dry Gas Production during gas week 4/12/12 increased approximately 0.75 BCF/d to average 64.59 BCF/d.

    April to date our US Dry Gas Production index comes in at 64.34 BCF/d versus the final March level of 63.85 BCF/d and April 2011 at 62.28 BCF/d.

    Growth continues to be led by gains in the Marcellus Shale.

    (click to enlarge)

    EARLY LOOK FORECASTS

    As of today, the Matterhorn Energy Demand Model sees the following going forward:

    (click to enlarge)

    Stocks: UNG, GAZ, KOLD, BOIL
Back To MatterhornEnergy's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Garfield23
    , contributor
    Comments (154) | Send Message
     
    we think the change could be even higher at +80 BCF, certain cos and rig want to produce as much as possible before the summer season where nat gas may drop to 0.75 per BCF.

     

    becareful everyone
    17 Apr 2012, 01:31 PM Reply Like
Full index of posts »
Latest Followers

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.