Oct

25

Novie expires this week. No significant cold weather is showing into most of next month. Storage inventory is likely going to finish at or very close to the levels of last year. We should begin seeing withdrawals right on the normal schedule according to my models. On the long term bullish side I am beginning to notice a slowing in the growth of production. It still is increasing, but at a slower pace. At this point the bulls can hope for a colder than normal winter in the Midwest and Northeast. Exporting LNG might also be helpful… on the LNG front the NBP/HH spreads are showing the gas should stay in Europe this winter. Also at these low [price] levels I'm hearing talk of coal plants in the SE turning off in favor of gas (aka coal-gas switching), which will help boost gas demand.

Just my $0.02… I am a natural gas market analyst in my day job.


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3 Comments so far

  1. Alaric Investments on October 26, 2010 11:13 am

    Tough for me to be a long term bull with the contango being what it is (5.38 12/12 & 4.86 12/11 vs 3.75 12/10)

  2. Sam Humbert on October 27, 2010 11:58 am

    Yes, the markets like to make it tough to buy cheap and sell dear. As the t-shirts say, “life’s a _____ and then you die.”

  3. Alaric Investments on October 27, 2010 3:51 pm

    Credit Suisse put out a short piece today “11 Logically Bullish Gas Market Factors”…..

    I am now becoming interested….

    Perhaps with a bit of a selloff in CAD there may be able to pick up some Canadian gas companies cheap-ish….

    Or perhaps wait for a warm spell in November/December in NY and follow the US Govt month-forward forcast looking for cold spells on the west coast a month out and timing the buy right…. :)

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