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  • dinkdestroyer dinkdestroyer Mar 28, 2013 8:04 PM Flag

    Latest drawdown

    Seeking Alpha article today, you should read. Titled:

    "Natural Gas Bulls Take Control As Inventories Fall At Alarming Rate, Surplus To Become Deficit".

    Here is the conclusion part. Can't post the entire article, no space.

    Bottom Line: The latest inventory report from the EIA was bullish as the surplus over the five-year average fell another 103 billion cubic feet to stand at 59 bcf. The seemingly never-ending cold snap across the East Coast and Midwest is set to continue in April, and thus we are likely to see inventories fall into a deficit vs. the five-year average in the coming weeks. The draw to be reported next Thursday is likely to be in the triple-digit range, pushing inventories close to 1,680 bcf.

    Depending on the extent of the cold weather during the first week of April, the following week could see a smaller but still-sizable draw, leading to a winter-carryout just above 1,600 bcf, or 100 to 130 bcf below the five-year average. While chilly temperatures have lent a hand to bulls in recent weeks, the withdrawals from inventories we've seen have been large even on a weather-adjusted basis. Whether this is a sign of the beginning of the long-awaited decline in U.S. production remains to be seen. Once temperatures moderate and inventories begin to increase seasonally, we will be better able to gauge how tight the supply-and-demand balance really is.

    In the meantime, we expect prices to establish themselves between $4 and $4.30, just on the basis of the low end-of-winter storage carryout that is now essentially in the bag.

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