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Msg  113401 of 238101  at  4/12/2013 11:29:22 AM  by

robry825


Daily Gas Flows (Comments)

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


.....NATGAS: EIA-weighted model missed the EIA number (14 BCF) while the capacity/gas-flow modeling one one (for a
.....change). The weeks withdrawal was 12 BCF to-the-bullish (on the 2-BCF-Draw baseline).

.....This was supposed to be a week for the bears... with odds-on-favor of bearishness from both pre-switchover under-
.....withdrawals (why waste compressor fuel when you can take it out of linepack) and a big stepdown in weather-related
.....demand (linepack not needed as much). The linepack should have tempered the weeks bearishness (and eased
.....production as well). We got the bullishness in production, but it didn't translate into storage.

.....If you can't get a bearishness out or that sort of week, where are you going to get it? Score one for the haze of switchover,
.....and for natgas bulls.

.....We haven't had a bearish week since February 1st.

.....Natgas remains terribly bullish, and for those here on the buy-side this is going to be a wicked, take-no-prisoners type of
.....bull market once we get beyond bottom-hole testing next week (when all storage fields are open for injections). Those
.....794 BCF (EIA) and 873 BCF (Cap/gf) year-over-year deficits have to be dealt with, and quashing generation fuel-switching
.....is only (says the Longer-Term model) going to get us half-way there.

.....My hunch is a lot of the buy-side is waiting to both up-injections and up-hedging once injections hit 70-80 BCF a week,
.....on the hopes we get the seasonal-letdown in natgas pricing. And my hunch is that they will be sorely dissappointed when
.....they do so.

.....The natgas drilling-rig numbers are probably 300 rigs plus too low, and what is going to lure an E&P away from $90 oil to
.....even $6 natgas? You can hedge oil all the way out to 2021 for $83.50 plus on the strip. December 2021 natgas is $5.55
.....as I write.

.....Structurally, this natgas market is a 2001 market... where natgas spiked to 2x par on oil ($30.00/mcf at $90 oil). My guess
.....is natgas takes a run at par by April 30th 2014 ($15 on $90 oil) but where it peaks could be a lot higher, depending on how
.....the cards play out. For those on the buy-side (municipalities, industrial users here on these boards), there is in my opinion
.....no time left to get the house in order. It will get continually, ever worse. $7 by September... $9 by January... $14 by May
.....2014 for maximums... educated guesses only, but these kind numbers dance in my head.

.....We will see how mild spring can be, how hot summer can be, how cold next winter will be. We will see how far production
.....will fall as we move through spring and summer. We will see if the economy resumes its expansion or slows (adding or
.....taking away from bullishness). And we will see if E&P's can get themselves unhedged (or move their hedging to less-bullish
.....CL if they have to hedge) to allow more revenue to flow through to drilling-budgets and less to cover hedging-losses as natgas
.....climbs ever-higher against hedging.

.....Ultimately, the markets have to force more money to E&P's and then force E&P's away from oil-only drilling to a more
.....balanced stance. The end-game for Natgas will only come when that happens.



.....ECONOMICS: No resumption of pre-Easter bullishness yet in the gas-flows. Was the pre-Easter surge (which was the
.....second-leg up in this economic move) completed? Or are we jubilently extending the holiday a few extra days? or are the
.....gas-schedulars just plain not-caught-up yet in their work (could explain the storage miss also). We will see better on
.....Monday Morning, but my tilt would be towards the idea that the second-leg is done and consumers have to wait for their
.....checkbooks to catch up.

.....Federal Reserve (in my opinion) looks to be doing the right thing (temporarily) on its easing, though it will have to be nimble
.....on changes to trade-related liquidity outflows (that it probably is half-blind to at present based upon statements comming
.....from it). Quantitative easing has to walk a tightwrope between recession and inflation, which in my thinking is tied between
.....population growth and foreign-trade.



.....1ST QUARTER EARNINGS look stellar on the jump in the consumption index. The gap between the industrial index and
.....the consumption index was stellar for the quarter and of a nature that (looking back) historically implies solid earnings.

.....1ST QUARTER GDP should (if it follows gas flows) I think will suprise... sequentially (Q1 over Q4) gas-flows underlying the
.....industrial index were up 2.49% quarter-over-quarter, while steel-plant scheduling (dourable-goods indicative) was up 9.85%
.....and the consumption index up 10.52%. These very strong numbers are probably being seen by the markets already as we
.....progress upward in the equities markets, and presumably by the accounting folks behind industry as they pull together their
.....quarterlies.

.....One could argue that the consumption numbers right now are too high to be sustainable (a second-quarter correction on the
.....booming consumption numbers of the 1st quarter probably is likely, and post-Easter might be soft, we will have to see) but
.....the industrial numbers are so far below the consumption numbers that the industrial side (and hiring) probably have upside
.....even if consumption corrects, and the economy looks to be well-supported at this time.



.....PRODUCTION / RESIDENTIAL & COMMERCIAL MODELING: Production Model remains in audit with problems
.....still to be resolved. Will be adding three new pipes to the production model shortly, while a fourth (already in the
.....model) appears to be skewed by withdrawals and needs to be rebuilt. R&C continues to be impacted by the skew
.....issues (it has been turned into a "balancing item" by the other models) which will be delt with in time by the
.....replacement of the EIA-weighted model with the new (presumed more accurate) capacity model. (The storage
.....demand catagory (also off) still represents the EIA-weighted model, but asside from the R&C, production, and
.....storage models all other models (Generation, Industrial, Import, and Export) are walled off from the skew and
.....production-counting problems, and presumed accurate).



Natgas scheduling to refineries...
...................................Scheduling
...................Day........... (MMCF)
...............03/09/13.(w)......447
...............03/10/13.(w)......447
...............03/11/13............451
...............03/12/13............430
...............03/13/13............434
...............03/14/13............424
...............03/15/13............440

...............03/16/13.(w)......422
...............03/17/13.(w)......413
...............03/18/13............403
...............03/19/13............402
...............03/20/13............367
...............03/21/13............364
...............03/22/13............382

...............03/23/13.(w)......413
...............03/24/13.(w)......435
...............03/25/13............428
...............03/26/13............426
...............03/27/13............442
...............03/28/13............432
...............03/29/13............424

...............03/30/13.(w)......424
...............03/31/13.(w)......418
...............04/01/13............405
...............04/02/13............413
...............04/03/13............410
...............04/04/13............380
...............04/05/13............400

...............04/06/13.(w)......400i
...............04/07/13.(w)......406i
...............04/08/13............402i
...............04/09/13............393i
...............04/10/13............388i
...............04/11/13............406i
...............(w) = weekend (Saturday/Sunday)




Today's economic numbers...

...............Weeklies.....Production........Consumption
...............02/02/13.............121.2.................161.3
...............02/09/13.............121.1.................160.5
...............02/16/13.............120.9.................157.3
...............02/23/13.............120.6.................149.7
...............03/02/13.............121.4.................153.1
...............03/09/13.............122.7.................162.8
...............03/16/13.............123.7.................170.0
...............03/23/13.............124.5.................177.0
...............03/30/13.............124.6.................173.3
...............04/06/13.............123.1r................168.2


.........................................---28 week avg---........---Daily (Raw)---......Daily
................Dailies..............Prod'n.....Cons'n........Prod'n.....Cons'n......Food
...............03/02/13.............121.4.......153.1..........2.092.......53.00.......60062
...............03/03/13.............121.6.......155.0..........2.116.......53.00.......59844
...............03/04/13.............121.8.......156.4..........2.113.......46.50.......59932
...............03/05/13.............122.0.......157.7..........2.162.......45.95.......59694
...............03/06/13.............122.2.......159.1..........2.126.......46.95.......60503
...............03/07/13.............122.4.......159.9..........2.124.......42.00.......58229
...............03/08/13.............122.6.......160.7..........2.147.......42.50.......59152
...............03/09/13.............122.7.......162.8..........2.048.......48.57.......60850
...............03/10/13.............122.8.......165.3..........2.059.......52.57.......59161
...............03/11/13.............122.9.......167.7..........2.040.......52.77.......61774
...............03/12/13.............123.0.......169.0..........2.068.......45.16.......59627
...............03/13/13.............123.2.......169.7..........2.099.......44.16.......60472
...............03/14/13.............123.3.......169.7..........2.109.......39.36.......59237
...............03/15/13.............123.5.......170.0..........2.163.......44.77.......59487
...............03/16/13.............123.7.......170.1..........2.055.......44.77.......53800
...............03/17/13.............123.8.......170.6..........2.059.......44.77.......52296
...............03/18/13.............124.0.......171.6..........2.044.......44.77.......54589
...............03/19/13.............124.1.......172.7..........2.055.......43.29.......59755
...............03/20/13.............124.3.......173.9..........2.007.......42.49.......56504
...............03/21/13.............124.3.......175.0..........1.993.......42.49.......58887
...............03/22/13.............124.4.......176.2..........2.067.......42.49.......57917
...............03/23/13.............124.5.......177.0..........2.055.......42.54.......55976
...............03/24/13.............124.6.......177.7..........2.078.......42.54.......55968
...............03/25/13.............124.7.......178.6..........2.051.......42.54.......56320
...............03/26/13.............124.7.......178.9..........1.999.......43.04.......60021
...............03/27/13.............124.8.......178.0..........2.030.......32.03.......52883
...............03/28/13.............124.7.......176.2..........1.973.......29.08.......43282
...............03/29/13.............124.7.......174.9..........1.965.......29.08.......43116
...............03/30/13.............124.6.......173.3..........1.954.......28.88.......42586
...............03/31/13.............124.4.......171.4..........1.953.......28.89.......42898
...............04/01/13.............124.2.......171.0..........1.918.......35.84.......58636
...............04/02/13.............124.0.......170.4..........1.896.......35.84.......58677
...............04/03/13.............123.7.......169.9..........1.933.......35.84.......58244
...............04/04/13.............123.5.......169.8..........1.966.......36.64.......59241
...............04/05/13.............123.2.......169.6..........1.918.......36.34.......58983
...............04/06/13.............123.1.......168.2..........1.950i......36.04i......58421i
...............04/07/13.............123.1.......166.3..........1.953i......36.04i......58677i
...............04/08/13.............123.0.......164.4..........1.961i......36.04i......57663i
...............04/09/13.............122.8.......163.4..........1.861i......36.04i......58561i
...............04/10/13.............122.5i......163.2i..........1.847i......36.03i......60092i
...............04/11/13................n/a...........n/a...............n/a.......37.73i......48127i





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