Chris McGill Natural Gas Market Indicators

Natural gas prices have swung up and down since the end of May on news of warm weather (power generation demand) and storage injections. Working gas injections tend to run highest during late May and June and analysts are pointing out that average injections of 80+ Bcf per week will be needed to reach 3.8-3.9 Tcf in storage by the beginning of the 2011-2012 winter heating season. Even with a decline in gas-directed drilling investment compared to oil targets, dry gas production is up 5.6 percent over the same period last year as we enter the summer. Pipeline imports from Canada seem to ramp up temporarily to balance power generation load and LNG imports remain subdued.

On the demand side, natural gas to power generation has already reached 28 Bcf per day, though peak summer gas load has been as high as 38 Bcf per day for cooling needs in the past, according to Bentek Energy LLC.

Visit this link to download the full Natural Gas Market Indicators. Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

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