Thursday, June 11, 2009

Natural Gas Inventories Report: Storage Overflow in 11 Weeks

North American Natural gas inventories were released few minutes ago. Last week there was an increase of 106Bcf, bringing the total stored to 2,443. This is 30.2% higher than last year.

Storage charts comparing 2008 and 2009:

(click to view)

Note the further breach of the top of the 5-year average range.

At the current rate, there will be an overflow of capacity, and no where to store the commodity, within 11 to 12 weeks. Analysts interviewed by BNN stated that there is no industrial demand and no end consumer demand as the weather has been cold. In addition, for similar reasons outside of NA, there is an oversupply of LNG (liquified natural gas) that is making its way here.

The only reason that natural gas prices have not completely collapsed is that oil prices are higher, due to speculation or the low USD.

We remain short until mid/late July.

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