As indicated by EnerCom’s Natural Gas Roundup inventory report, gas levels fell in line with five year averages for the first time in nearly a full calendar year in the report issued on December 12, 2014. Storage levels were as much as 33% below the five year average in March, but a cooler summer, record injections and forecasts for a warmer than usual December all contributed to natural gas recovering to fall within the five year range.
After nearly 12 months of catch-up, natural gas inventory had a bearish effect in prices, which dropped to its lowest level since January 2013.
The Wall Street Journal reports: “This December is on pace to be the ninth-warmest winter since 1950, according to MDA Information Systems LLC. The warm-up has both limited demand and allowed producers to work unimpeded. Drillers are producing about 8 billion cubic feet a day more than this time a year ago, Macquarie Research said last week as the losing streak started.”
EnerCom’s Natural Gas Pricing Forecast is the focus in our Chart of the Week. Our model shows prices dropping near the $3/MMBtu range in July 2015 after staying above the $4/MMBtu threshold through April. Our current model indicates natural gas is currently being oversold, a notion shared by Bruce Baruch, senior marketing trader for iiTrader. “This is panic selling right here,” he said in an interview with CNBC.
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