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We Have A Ways To Go Before Natural Gas Rebounds

According to the U.S. Energy Information Administration's ((EIA)) newly released report, working gas (dry natural gas) in storage was 2,428 Bcf (billion cubic feet) as of Friday, Jan. 30, 2015. This represents a net decrease of 115 Bcf from the previous week. Since the beginning of the current withdrawal season (November to March 2015), the total net withdrawal of working gas in storage was 1,183 Bcf, as shown in Table 1.

Since the middle of December, natural gas prices have been depressed due to a relatively milder December and normal January, continuous increases in dry natural gas production, and general weakness in commodities -- particularly crude oil. The depressed natural gas prices have, most of the time, remained below $3/MMBtu since then. With less than two months left in this withdrawal season, the sentiment of NG traders is very bearish.

In order to better understand the current natural gas… Read More …