Factor - Natural Gas Supply
Commentary
Overall natural gas production has rebounded from the weather- related declines in early 2011 and is forecast to continue to grow well into the summer with a year-over-year increase of 3 to 4 billion cubic feet per day. Many analysts still see robust growth in the dry shale plays through the remainder of the year.
Factor - Demand
Commentary
Every demand sector (residential, commercial, and industrial) is up for the entire 2011 calendar year. Weather is the obvious factor as heating degree days are approximately 20 percent higher year-over-year. The overall economy has grown, but at a much slower rate and near-term growth expectations are down.
Factor - Weather
Commentary
Weather models for June have the country split, with below average temperatures in the north and west and above average temperatures in the south and east. Hurricane season started June 1. The expected La Nina pattern, combined with above normal Tropical Atlantic temperatures, should translate into another very active hurricane season.
Factor - Storage
Commentary
Current natural gas storage levels are nearly 2.1 trillion cubic feet, which is 42 billion cubic feet below the five-year average and 237 billion cubic feet below last year's levels. In May 2011, injections averaged approximately 88 billion cubic feet per week, compared with 90 billion cubic feet per week in 2010 and 94 billion cubic feet per week for the five-year average. Though inventories are below last year's levels, they are expected to fill up through the summer, especially with supply growing at a greater rate than demand.
Factor - Economy
Commentary
On the bearish side, the first quarter gross domestic product grew at 1.8 percent versus the expectation of 2.1 percent growth. May consumer confidence fell 5.2 percent to 60.8 and existing home sales was down 0.8 percent. To the upside, recent job claims are down and personal income growth was greater than 0.4 percent. These upside indicators are weak at best.
Factor - Summary
Commentary
Currently, the only strong impetus to natural gas price increases is rising demand. Weather also may contribute to price upside if the short- term predicted heat waves occur and the hurricane season is as active as predicted. Supply continues to remain strong and the slowdown of the economy is certainly in the forefront.
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Factor - Natural Gas Supply
Commentary
Overall natural gas production has rebounded from the weather- related declines in early 2011 and is forecast to continue to grow well into the summer with a year-over-year increase of 3 to 4 billion cubic feet per day. Many analysts still see robust growth in the dry shale plays through the remainder of the year.
Factor - Demand
Commentary
Every demand sector (residential, commercial, and industrial) is up for the entire 2011 calendar year. Weather is the obvious factor as heating degree days are approximately 20 percent higher year-over-year. The overall economy has grown, but at a much slower rate and near-term growth expectations are down.
Factor - Weather
Commentary
Weather models for June have the country split, with below average temperatures in the north and west and above average temperatures in the south and east. Hurricane season started June 1. The expected La Nina pattern, combined with above normal Tropical Atlantic temperatures, should translate into another very active hurricane season.
Factor - Storage
Commentary
Current natural gas storage levels are nearly 2.1 trillion cubic feet, which is 42 billion cubic feet below the five-year average and 237 billion cubic feet below last year's levels. In May 2011, injections averaged approximately 88 billion cubic feet per week, compared with 90 billion cubic feet per week in 2010 and 94 billion cubic feet per week for the five-year average. Though inventories are below last year's levels, they are expected to fill up through the summer, especially with supply growing at a greater rate than demand.
Factor - Economy
Commentary
On the bearish side, the first quarter gross domestic product grew at 1.8 percent versus the expectation of 2.1 percent growth. May consumer confidence fell 5.2 percent to 60.8 and existing home sales was down 0.8 percent. To the upside, recent job claims are down and personal income growth was greater than 0.4 percent. These upside indicators are weak at best.
Factor - Summary
Commentary
Currently, the only strong impetus to natural gas price increases is rising demand. Weather also may contribute to price upside if the short- term predicted heat waves occur and the hurricane season is as active as predicted. Supply continues to remain strong and the slowdown of the economy is certainly in the forefront.
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