For the first time in years, the Top 40 US Natural Gas Producers posted a decline in production YOY for Q1 2013. The top 40 produce roughly 1/2 of US production. It is a year over year statistic - it's compared to Q1 2012.
The decline amounted to 181mmcfd. Q1 2013 production was 34,542, Q1 2012 was 34,723. Additionally Q4 2012 production was 35,080 per NGSA (Natural Gas Supply Association).
The year over year supply decline represents less than a 1% decline. The quarter over quarter decline represents about a 1.5% decline.
According to widely self acclaimed Natural Gas expert Rainbow: "the good news for Natural Gas is just beginning, Marcellus is at or soon to be at an inflection point, and production declines will continue to accelerate...the Koch brothers and others are manipulating the NG futures markets for their own self serving interests, when NG breaks out it will be explosive, those guys can't hold the price down forever, and the longer they do the more radical the upward price will be when it finally breaks".
Not so fast says the "smartest and one of the most successful" SD Shorts ever, investor Cleint9: "Rainbow has been spewing this NG stuff for years, so what if he called the double bottom, the guy has blinders on his eyes and owes us an apology - don't listen to him he is a dummy".
Key takeaway here is that NG production looks like its declining and demand is building. GLTA longs. Check out the NGSA website and DVN's presentation for confirmation. It's real and its happening. I hope NG prices get held down until Q4, by then CAPEX plans will be in for 2014 - for the most part just liquids, and NG will go nuts later in 2014 as storage gets drained.
I've read the EIA forecast and studied the studies that back it up. They have missed the Mexico exports, did not account for reversal of flows of Canadian NG in a significant. relied too much on sweet spot analysis, ignored Oil to NG BTU coefficient, and economics of liquids vs Dry NG.
Additionally ignored is the amount of time to shift gears from Oil to NG - took 3 years to shift from NG to Oil and the psychological factor of chasing NG - the E & P companies got burned bad on it last time around. EIA and futures markets have missed the market in extreme ways in the past, both high and low. I may be off a bit on my timing, but have called NG right for the most part so far. Go read the reports that EIA bases their statements upon, pick up a copy of Bill Powers book (Cold Hungry and in the dark - exploding the Natural Gas supply myth). Analyze world NG prices, and talk to me about the brownout problems that Germany and others are having regarding wind and solar.
Let me know when you think you have done more DD on NG than I have.
And as I previously posted, there is evidence that supply is already declining.