US natural gas:
- fill rate well below 5-year average and the gap is not closing
- New England could face natural gas shortage over next month or so
- natural gas being diverted from New England to Florida
- Florida: #1 electricity producer in US; #2, Texas
- Florida: converting from coal to natural gas
- a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
- and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
- Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
- shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market
Domestic natural gas production of about 82 billion cubic feet a day isn't nearly enough to provide for peak winter demand, which is why up to about 4 trillion cubic feet of gas is stored underground and nearly 3 trillion drawn upon during some heating seasons.
This year, though, the U.S. Energy Information Administration expects the starting amount at the end of next month to be around 3.3 trillion cubic feet--the lowest since 2005, when natural gas prices hit their all-time high.
A projected ending storage level much below 1 trillion cubic feet often spooks traders. A 2005-style hurricane-fueled squeeze is out of the question, but a big price spike isn't.
It was just four winters ago that a cold winter caused a 75% surge in futures prices to above $6 a million British thermal units. So far there is little sign of anxiety among traders, with both front-month and February futures below $3. Thursday's weekly inventory report and forecasts for continued builds in coming weeks were encouraging, yet storage is now 20% below year-ago levels and 18% below the five-year average. Possible tough sledding ahead.This is not from The National Inquirer, or from some nut contributing to SeekingAlpha.
The natural gas concern is from The Wall Street Journal.
Link here. Or here if you have a subscription to the Journal.
Note: natural gas out of the Permian is going for as little as 50 cents, it was reported not too long ago.
Re-posting: LSD. Story here. Silicon Valley (?) getting ready to do "formal"testing. We talked about this earlier this year.
Three-page essay in the current issue of The London Review of Books, by Mike Jay, in his review of two new books:
- How to Change Your Mind: The New Science of Psychedelics, Michael Pollan, May, 2018
- The Science and the Story of the Drugs That Changed Our Minds, Lauren Slater, February, 2018
Notes To The Granddaughters
I have journaled all my life. I have kept calendars. I make and keep lists. I am obsessive-compulsive about these sorts of things.
I wish I had done even more. I can think of many more things I wish I had done along this line.
But it looks like I paled in comparison to Kavanaugh's journals and calendars. Wow.
I think about that often. I thought of it again when reading the "Diary" essay -- a regular feature -- in The London Review of Books.
Will I destroy my journals before I die? I was brutally honest in them. Often I wrote when I was most depressed.
Wow, it was so much easier back then.