We are currently in a holding pattern waiting to see what happens this Thursday with the natural gas storage report numbers.
As I mentioned last Thursday – the small build in the storage supply was a huge disappointment to the market, and prices shot up. Natural gas is storage as of last week’s report was exactly half of what was in storage a year ago, and 54.3% below the 5-year average.
Most market analysts agree drillers will bring a record amount of natural gas out of the ground this year. The concern right now in the market is we are not building the amount of gas in storage fast enough to meet next winter’s needs. Last week’s report showed 850 bcf in storage. We will need between 2,600 and 3,100 bcf of natural gas to meet the nation’s heating needs this winter.
Yesterday, natural gas prices dropped 4.4 cents. Today natural gas prices are up 4 cents in a very narrow trading range. No one can make up their minds as to which way prices will go until we see this Thursday’s report.