Almost 200 BCF in storage below last year at this time and I think the 2014 build will not be as large as 2013 due to all the infrastructure hookups of pipelines that were completed in 2013 causing a large build rate.
Surprising SD and other O&G companies aren't trading better but I guess the market is discounting the last couple weeks as 'abnormal'. I think it will be -183 for the week ending December 7th. Last year for the period ending December 7th there was a 2 BCF build so we are well on our way for a much larger draw down this season!
Plus the December 7 thru 13 week looks like a 200 Bcf draw. It's not even winter yet! NG trading .60 higher than last year on this date. If the weather continues to be cold, NG will hit 5.00, maybe 6.00. No dry NG CAPEX for 2014.
And don't expect to see dry gas CAPEX step up unless the Contango situation flips. Very interesting situation unfolding, below the 5 year average and significantly below last years storage. Should mean heavy upward pressure on pricing going forward.
NG stocks are going to heat up in the next year or two. They are still very cheap. We will need an additional 20bcfd of supply by 2017, with a significant amount needed by 2015. Supply has been flat for about 2 years and isn't forecast to grow much in 2014.
So we will need 20bcfd supply added from 2015 - 2017. No chance that happens unless the price goes up substantially, and even then it will be difficult.
Has the US ever increased supply by 20bcfd in a 2 to 3 year time frame? Has any country ever increased supply by that level in that short of time frame?