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Thursday, December 2, 2010

Weekly DOE Natural Gas Inventory Analysis - 12.02.2010

Withdrawal slightly greater than expectations – The EIA reported a natural gas withdrawal of 23 bcf, lower than expectations (as per Bloomberg) for a 29 bcf withdrawal but less than the five-year average of a 43 bcf withdrawal. For the comparable week last year, the EIA reported an injection of 2 bcf. 
Storage levels still at record highs – Total storage now sits at 3,814 bcf, or 0.6% below last year’s levels for the comparable week of 3,837 bcf, and 10.0% above the five-year average of 3,467 bcf.
High coal prices shoring up gas prices – Appalachian coal prices surged dramatically yesterday to new 2010 highs, and this coal move is helping to shore up gas prices on the basis of a coal-gas switching in regards to power generation. Coal prices yesterday were up 3%, which is pretty impressive volatility in the normally sedate coal market, resulting in our implicit coal-gas switching price escalating to $4.52 as of last night’s close.

EIA 914 data for September Shows Solid Growth – Total Lower 48 volumes of 66.33bcfpd were up +480mmcfpd (+0.7%) MTM and +5bcfpd (+8.1%) YOY. Onshore Lower 48 volumes of 60.37bcfpd were up +680mmcfpd (+1.1%) MTM and +5.77bcfpd (+10.4%) YOY.

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