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Chesapeake Energy Corporation Message Board

  • tobinator00 tobinator00 Feb 14, 2003 10:59 AM Flag

    $7 Natural Gas By March 1st??

    I believe that it is very possible based upon the latest natural gas storage numbers. In the WSJ Futures section it talks about 1 Tcf (trillion cubic feet) of storage as the point where gas traders get nervous. Presently EIA data has 1.317 Tcf in storage at the end of last week. Here's their link:

    **tp://tonto.eia.doe.gov/oog/info/ngs/ngs.html

    This link is a graph of historical NG storage over the last 8 years plus this year. (Click on EIA-AGA storage.)

    **tp://www.highlandenergy.com/

    As you can see, we are very close to 2001's figures, which was the "ENERGY CRISIS".

    On CWEI's board there is a poster, Robry825, who predicts storage levels. I have followed him for some time and his numbers are very accurate. One week he said that there would be a withdraw from storage of 218 bcf. EIA had the figure at 210 bcf. The following week EIA revised their figure to 219! More than likely they will revise their 150 bcf figure to around 165. That will mean we are at 1.356 bcf as of last week. Robry is predicting a 210 - 230 bcf withdraw for this week. Assuming it hits 220, we will be at 1.136 Tcf as of this week. We will have 136 bcf to go to get below 1 Tcf with two weeks of February left. Even if we average half of the Feb to date average draw, we will go under 1 Tcf.

    IMO, once we go below 1 Tcf we will see gas shoot up to $7 near term and NO longer here from the press about "energy gluts". I think we will begin hearing the term "ENERGY CRISIS" again. CHK, MIR, RRI and XEC's stock prices should begin to go to their true value. (XEC is a company that produces Natural gas and Oil, with little debt, and does not hedge (i.e. they sell into the spot market).

    Here's an exerpt from Robry's post today from the CWEI board:

    Another strongly bullish report from the EIA- last weeks 150 BCF withdrawal beat both the baseline (116 BCF) and the more-important backshifted baseline (118 BCF).

    The year-over-year deficit eased a bit to 789 BCF (From 811 BCF last week). It should continue its rise the next couple of weeks to the 900's.

    1 TCF deficit projection bumps back 1 week to 3/21/03, (was 3/14/03 last week).

    Spring projection improves slightly to 411 BCF on 4/18 (was 372 BCF on 4/11 Last Week), and does so with withdrawal estimates of 161, 168, 147, 131, and 116 BCF for the next 5 weeks (On Degree-day estimates of 185, 188, 176, 163 and 150 respectively, the latter 4 being seasonal norms). That first 161 BCF estimate will be wrong, however, as gas flows suggest a much higher number.

    Fall 2003 storage projection also improves but to a still rediculously low peak of 1271 BCF on 10/24 (was 1183 BCF last week). Fall projection of course is very unlikely, market should adjust supply/demand balance on pricing, radically if need be, to bring storage at least to 2500 (by my thinking). (I hope I am not wrong.)

    Run-out projection bumps back a week to 1/16/04 (was 1/09/04 last week). Very low confidence in these last two projections.

    NEXT WEEKS EIA REPORT: EIA may be stacking the deck for a huge withdrawal in next weeks report. Gas flows are tremendous- indicating 148 BCF withdrawn so far (through Thursday night), puting us on track for a 210-230 BCF pull. This would be wildly bullish against the Baseline for next week (115 BCF draw on 185 Degree-day NOAA estimate), as well as the backshifted baseline (also a 115 BCF draw), although daily degree-day data suggests the NOAA estimate was quite low.

    In addition, I am mindfull that those much-delayed weekly storage updates posted Wendsday night (well beyond the EIA's Monday deadline) may at least in part not have made it into this weeks EIA report, meaning they get added into and above that 210-230 BCF estimate for next week.

 
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