Nov 1 usually considered the end of the injection season Let’s talk storage for a moment. Approx. 5 meaningful injections are left in the season. Assuming 65Bcf per week = 325Bcf. + the current amount in storage 3466= 3791. Now that fill would be low!
The prudent thing for the industry to do would be to go beyond that number. Truth is they can, simply by putting it into storage and letting the spot rise in October. But if there is an October demand for NG that would make it difficult to accomplish. So, we will have to monitor what they do in the next 5 weeks, -within the strait jacket of what the actual demand conditions will allow them to do. If they don’t get above 3800 Bcf then I’d say we have a pretty good situation for good run-up in prices during the winter, particularly if it’s a cold one. Note that storage last year topped out at 4047. At the end of the 3rd week of Sept. last year we were sitting at 3600Bcf. compared to out current 3466. Keep that in mind!!!
If we had some good drawdowns in stocks in Nov. and early Dec. (like 2012-13) it would put a lot of pressure on prices. Usually, but not always, the best prices for NG spot is the last week in December, but in the 2012-13 winter they just continued to rise.
So keep an eye out for the EIA injection reports each Thursday throught October.