Huge Natural Gas Draw In July; Last Time This Happened: 2006 -- Eleven Years Ago -- Tuesday Market News -- Nothing About The Bakken -- Yet -- August 9, 2016

Is something going on? We have the data but not the analysis. From PennEnergy: high natural gas-fired generation leads to rare summer net national weekly storage draw.

This is really cool. When I started the blog back in 2007, deleted it, and then started again in 2009, I knew nothing about natural gas and did not plan to blog about it. But a reader kept pestering me with natural gas data and I finally got the message: natural gas is important. Well, duh.

So, now I know a bit more about natural gas. Not much more, but a bit more. I do know something about natural gas storage and weekly "draw" data. So that's interesting.

I'm glad the reader kept at it. Otherwise I might have blown past this story, but it seems to be a biggie. We have the data but not the analysis. Go to the link for the graphic. From the linked article:

Working natural gas storage inventories posted a rare summer net withdrawal of 6 billion cubic feet (Bcf) for the week ending July 29, 2016, according to EIA's Weekly Natural Gas Storage Report.

Record-high consumption of natural gas for electric power generation drove this withdrawal.

Although withdrawals in the summer are not unprecedented, and happen regularly in the South Central storage region, the last time a net withdrawal in July occurred on a national basis was in summer 2006.

This net withdrawal brings total inventories to 3,288 Bcf, or about 16% higher than the previous five-year average (2011–15).

During the current injection season, net injections had already been much lower than the previous five-year average for almost every week. This trend reflects an unusually high inventory level at the start of the injection season, high power burn, and slightly lower natural gas production, which has recently fallen below year-ago levels. Following a warm 2015–16 winter, inventories headed into the injection season were at record high levels. Despite lower injections, and a net withdrawal this week, inventories are still substantially higher than the five-year average and year-ago levels.

Some data points:

• US economy not particularly robust, so that is probably a "wash" when trying to explain the drop; although the contributor said natural gas demand was due to increase in electricity demand, no numbers were provided for this year or for 2006. [In fact, the EIA has not posted the numbers for June or July, 2016 - a dynamic link.]
• US natural gas production is surging. Hmmmm....
• US natural gas delivery systems, infrastructure vastly improved over past couple of years. Hmmmm....
• coal plants closing faster than ever. Hmmmmmm.......
• wind and solar energy increasing. Hmmmmm....
• wind and solar energy require dispatchable natural gas "back-up" --- a big "hmmmmm......"
• atmospheric CO2 decreased month-over-month, July-over-June. Hmmm....
• I couldn't possibly run the numbers but everything I've read suggests General Electric and Warren Buffett's Berkshire are heavily weighted toward a) natural gas; and, b) a growing US economy.

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California Natural Gas

This is a most interesting graphic from the Obama administration. This is a graph that could be easily overlooked, and the data points are even more interesting:

Add these data points to the graphic above:

• the state mandates more non-dispatchable energy which requires more natural gas 
• the state is closing (or has closed) all nuclear reactor sites 
• the hottest part of the year is yet to come
• the tea leaves suggest demand for energy will increase in California
• the state is politically not particularly eager to produce more natural gas
• assuming natural gas operators are at least somewhat efficient, either the past five years were way out of whack, or this year, something else is going on (yes, I am aware of SoCal leak)
• California, like Hawaii, is an "energy island" but for different reasons

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The Market

Mid-day, the Dow 30 is flirting with new highs. On the NYSE, 230 new highs.

• BRK is nearing a new high
• MDU is inexplicably down a bit
• GE is flat
• SRE is down a bit
• T is very close to a new closing high

Early morning trading gets off to a good start: the S & P near record highs. NYSE:

• new highs: 188 -- none of which interest me, except perhaps PBR
• new lows: 5