Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

NATURAL GAS INVENTORY (Week Ended 2/20/15)roundup2

Current: 1,938 Bcf

Actual Injection/(Withdrawal): (219) Bcf

Economist Average Estimate: (241) Bcf

Previous: 2,157 Bcf

Click here for the chart with five year averages.

Click here for an archive of EnerCom’s Inventory Reports.


ANALYST COMMENTARY

CIBC World Markets

The EIA revealed a much smaller than expected draw of -219 Bcf relative to market expectations of -241 Bcf. The draw was 7 Bcf softer than even the most bearish of the analyst estimates on Bloomberg. In other words, today’s number was not just soft relative to consensus, but it was much more bearish than what anyone was expecting. The release triggered a sharp push lower in the front end of the curve back towards the $2.70/MMBtu range.

Despite the miss to the downside, a 200 Bcf draw in any particular week is large and has only happened in 14 other weeks over the past five years. Residential/Commercial demand spiked to nearly 65 Bcf/d last week (+20 Bcf/d WoW), which is the largest weekly average seen in at least the past 10 years. Relatively strong production, coupled with an increase in LNG and imports from Canada helped to cushion the jump in demand.

This month will wind up being the coldest February in at least the past 10 years (providing that HDDs clock in as forecasted for the next couple of days). Gas weighted HDD seen this month will finish more than 8% higher than last year’s polar vortex plagued February.

The inability to stage a sustained rally above the $3/MMBtu mark, despite the cold, is telling. The difference between this year and last is that current inventories are relatively in line with historical averages and 576 Bcf higher above last year’s levels. YoY production is also more than 11% higher so far this month. Despite the colder month this time around, freeze offs seen last February were almost double what we’ve seen on a month to date basis, mainly because we saw larger freeze offs from the Louisiana and Texas regions last year.

Prices will wax and wane with the weather as forecasts are suggesting widespread cold through the first two weeks of March, but the downward trend will likely remain intact as weather fades and the focus shifts to a looser market come the summer.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.