Yesterday we found out we have more oil in storage than at any time since 1930.
Today, the natural gas storage report was again bearish. The analysts were expecting a draw down of 119 bcf and we only had a draw of 115 bcf.
The most important aspect is you may remember my mentioning that last April we were a trillion cubic feet under the five-year average for gas in storage (1008 bcf…). Well, as of this report we are only 29 bcf below the 5-year average and are producing gas 15% greater than last year, another record.
The current gas contract fell to $2.578 after the report was released. That is the lowest price for natural gas since August 2012. I thought we would see gas at $2.50 this Spring – I just didn’t think it would be this fast.
Low electricity rates should be with us for awhile as I cannot see gas going above $3.35 any time this year.