“The Sky is Falling” – SELL SKY!
Natural gas production continues to reach record levels, and is best illustrated by today’s natural gas storage report.
The analyst’s predictions were for a winter draw down of natural gas of 123 bcf which was still below the corresponding week last year and within the 5-year average. BUT, the report shows a draw down of only 94 bcf.
This unusually small draw now puts the amount of gas in storage at 324 bcf above last year and only 79 bcf below the 5-year average. We have progressed a long way from the 1,008 bcf of gas below the 5-year levels we saw last April. We have closed the gap significantly.
And natural gas has sold off with the current contract dropping to $2.722 so far this morning, the lowest in two and a half years. This means we have lower electricity rates in our future. I would not be surprised to see gas reach $2.50 sooner than I had expected.
Go make your customers happy!