Before we find out just how cold nor not-so-cold this winter is there will fear b/c of the storage #'s. Speculative buying on winter storage fears usually begins in the summer (although actual buying for storage begins in April) and continued into Jan in 00-01, but ended in Oct in 99-00. Even if the winter is mild, prices will run before that verdict is in, just on concerns that it will be cold. If it turns out to be mild, I agree, prices next year will fall, and perhaps the cycle will turn down.
This summer will see record gas demand from the electricity generation side - record number of new gas plants, and low water levels in the PNW (pissed away this winter to keep Cali lights on). Peak demand there will be met by gas, not water - this could add 1-1.5Bcf/d to demand (which BTW, is the high end of new gas supply)
Speaking of new supply, NG production is flat from last year
simmonsco-intl.com
OK, I tell a fib, 4q NG production was down 2.7% from '99, although up a tad from 3q. Point is, we haven't yet seen a jump in supply (although I think that's coming by this summer).
How much do we need to inject?
Last year we injected 1.74TCF and ended the build season with 2.748TCF. In order to come back to 2.748TCF by the beginning of the withdrawal season, we would need to add somewhere around 2.100TCF. In other words, there will need to be record setting injections this year, and the increase in production will need to happen in the next 6 months, cuz it hasn't happened yet.
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