Bright blue flame

Working gas in storage was 2,611 Bcf as of Friday, July 8, 2011, according to EIA estimates. This represents a net increase of 84 Bcf from the previous week. Stocks were 218 Bcf less than last year at this time and 52 Bcf below the 5-year average of 2,663 Bcf. In the East Region, stocks were 116 Bcf below the 5-year average following net injections of 59 Bcf. Stocks in the Producing Region were 100 Bcf above the 5-year average of 901 Bcf after a net injection of 14 Bcf. Stocks in the West Region were 36 Bcf below the 5-year average after a net addition of 11 Bcf. At 2,611 Bcf, total working gas is within the 5-year historical range.


The stage is being set for a massive heat wave to develop into next week as a large area of high pressure is anticipated to circulate hot and humid air over much of the central and eastern U.S. Maximum heat index values of at least 100°F are likely across much of this area by the middle of next week, with heat index values in excess of 110°F possible over portions of these areas.

When it’s hot, air conditioning loads increase, power generation and transmission decrease which increase natural gas demand. If our blistering hot summer swings into a remarkably cold winter we could see a real rise in natural gas prices.

In addition, the EPA standards issued let 27 U.S. states from New York to Texas reduce power-plant emissions through trading in which companies exceeding limits can buy credits from those in other states that pollute less. The rules also may force as much as 47.8 gigawatts of electricity, or about 15 percent of coal’s U.S. production capacity to close.

So, short- and long-term natural gas seems to have a bright future. BHP seems to agree, along with Exxon, Shell, et al.