Gas Petrospective – June 13, 2011
Natural gas prices gained more than eight cents per million Btu on Friday, which gave it gains of five cents per million Btu for the week. Hot temperature forecasts across large parts of the nation were the springboard to higher levels, and prices printed new 11-month highs on Thursday, before ending the week. The latest forecasts predict hot weather along the Eastern seaboard on the 11-15-day horizon. Readings are also forecast to be hotter-than-normal in the upper Midwest and in Texas. As we have noted here before, extreme heat or cold in all three areas at the same times is typically bullish for storage and prices.
Stocks are 255 bcf (-10.44%) lower than a year ago, against a deficit of 237 bcf (-10.11%) a week ago. Against the five-year average, they are 58 bcf (-2.58%) less than a year ago, compared to 68 bcf (+4.37%) higher nine weeks ago. Last year, there was a build of 98-99 bcf and the five-year average is a build of 94-96 bcf, so last week’s report actually improved the fundamental outlook.
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