Bellatrix Exploration Ltd (Canada) BXEFF

RE:RE:NG prices should easily exceed USD 4.00

[dinkdestroyer]

I don't expect $4 in spot month futures(Jan '17), but I do expect it before the end of withdrawal season. What we need first is for storage to start to drop substantially under last years levels which could easily happen in the next 30 days. Supply and demand balance has tightened to the point where a significant storage deficit cannot be made up quickly(or at all depending on magnitude of withdrawals). That will mean price must rise to destroy demand, problem is so many coal plants have closed or are on track to close, no alternative exists to replace this generation other than gas. Fortunately for the Western U.S., Hydro reserves are flush right now, otherwise this coming weather would be a huge problem. We are going to see some coal replace gas this winter, but the swing factor is much more limited thanks to depletion of coal generation capacity.