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Natural gas storage injection bearish

BULL RUN ENERGY RESEARCH

60 STATE STREET, STE. 746

BOSTON, MA  02110

                     CONTACT INFORMATION

           

            WILLIAM E. COSTELLO, CFA

                  BULLRUNENERGYRESEARCH@COMCAST.NET

                  617.878-2030

May 27,2010

 

Natural Gas Storage

For the week ending May 21, 2010

 

 

Energy Information Administration weekly storage report.

 

  • The EIA reported a 104 Bcf injection into storage vs. consensus estimates of 101.
  • This was above both our 99 estimates and street numbers.
  • This puts us at 2,269 Bcf (2.3 Tcf) in storage vs. 2,198 last year and the five-year average of 1,951 bcf.
  • This injection was between last year (106) and above the five year average (94)
  • We are now 71 Bcf above last year and 318 above the five-year average.

 

SUMMARY:

 

We view this injection as bearish to the natural gas market and the gas-weighted equities. Working gas in storage is still way above the five-year historical range and above last year. Between now and November 1 we typically inject +/- 1,700 Bcf so we seem to be on track to enter next year’s winter with just about 4,000 Bcf (4.0 Tcf) in storage. This would be an all time high. The numbers we look at indicate we are over supplied by about 1.5 Bcf per day and either supply must slow or demand grows to alleviate the problem. We have seen some signs of slowing activity but the rig count hasn’t shown any meaningful signs of turning down yet.

 

 



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