Hannoverian, thanks for your thoughts. I take everything the analysts say regarding their conclusions with a grain of salt, but I tend to lean on them for factual data since I'm basically lazy and I assume that they couldn't get away with putting out stuff that was factually inaccurate. The Citi report dated 2/21 (thanks Dennis) cites an increase in '13 natty production of 1.8 bcfd, admittedly still not as much as the last 2-3 years but when you drill down into the data you will see that a significant amount of new pipelines came online in the Marcellus in November, so in more current terms we are running production at quite a bit higher rate than that vs. the same month in the prior year. For example, in the December EIA 914 report that just came out on Friday, 12/13 Lower 48 production, even in spite of all the well freeze-offs, was 3.21 bcfd higher than 12/12 production, see eia.gov .
Citi is calling for production to increase by 2.4 bcfd this year vs. last year, which seems reasonable given the low natty-directed rig count and seems to be more or less in line with consensus. When I first saw both Citi and Morgan Stanley settling for only 3.6 TCF as a target for ending fall storage levels my first reaction was similar to yours, i.e. that that would not be enough, but the more I thought about it I believe they are figuring that with the 2 bcfd of additional supply, 3.6 TCF next Halloween would be roughly equivalent to the 3.8 TCF we had last Halloween. |
