One question: in your focus on storage, shouldn't you be taking into account that with the high price of crude, substituting into NG will increase demand to a much higher level than if crude were at $30, storage, weather and everying else the same?
Yes, I do agree that fuel switching from higher cost (on an equivalent btu) crude to nat gas has happened and continues to maintain. But, I feel that all the switching that is going to happen has likely already happened, unless crude makes a new high.
More importantly, even with all this apparent fuel switching to nat gas consumption, storage has managed to fill to an all-time high. Obviously, some of this was due to a cooler than average summer that lowered electricity demand. But, looking at the numbers, one has to feel that more gas is either not being used, or more supply is coming down the pipe. Probably a reasonable combination of both. And remember, there is still about 4-5 bcf per week of GOM shut-ins that are not being added to the market right now.
Look at it in its simplest form, if you believe that the storage number is a good barometer of the balance between supply/demand on a relative basis, one could point to the current record amount as an indication that, fundamentally, supply may not be as tight as the market is indicating.
Traders, speculaters and momentum players may have been the main reason for the price spike over the past couple of months much more than the fundamentals justify and support.
Fundamentals generally win out over speculation in my opinion.
What we need is ic4x to try to predict the direction of nat gas with his SJT model, it seems to work well!