Sharp, one man's "bloat" is another man's "normal" I guess. We have had a normal winter and will have pulled about 2.3 TCF from storage this winter.
RayJames, a natty bear, is expecting something like 2.3 TCF of injections this summer. 2 assumptions made by RJ which are clearly off are: 1) that LNG imports would run 1 bcfd higher this year vs. last year, and 2) that Canadian imports would run only 0.5 bcfd lower than last year. Its clear that LNG imports will at best be flat to last year (see article I posted earlier this morning). Although perhaps not as clear, I believe a more realistic delta for Canadian imports would be 1 bcfd lower this year vs. last year. Adjusting RayJames' injection forecast for the above gets you to just 2 TCF of injections. Note that this forecast has zero room for slippage due to hurricanes, extended hot weather, etc.
So if we start with 1.3 TCF and we add 2 TCF we get to 3.3 TCF. But as demonstrated this winter, a normal winter equates to a 2.3 TCF draw, which would put us back to your 1 TCF level. But wait --- with prices where they are now, we just got done saying that we are good for 2 TCF of injections per summer. So we are now looking at a future where, unless natty prices get higher, we will be taking 2 steps forward and 2.3 steps back each year, assuming normal weather. But as we know, the storage operators are supposed to plan not for normal weather, but rather for enough storage to withstand a colder-than-normal winter.
In light of the above I find it hard to describe 1.3 TCF as being a "bloated" storage level. |
