Monday Musings ……

We saw the Nymex prompt month climb over $.30 last week due to record setting storage withdraws, market constraints and weather models coming in colder for February.  So, if you are in a market that has an inverse relationship with the Nymex, now’s the time to look at your basis market.   Lock in those negative basis numbers and sit back and wait till the Spring thaw.

Rig count is still higher at 188 active compared to 145 active this time last year. We could see daily production increases of over 50+ Bcf by the middle of summer.

Spring pondering…..  with record breaking storage withdraws and freeze-offs happening will we finish the withdraw season well below the five-year average?  Can we make up the deficit during injection season?  Will exports increase and put further drain on production?

Weather in the 8-14 day outlook is looking pretty cold through the Midwest, Upper Great Lakes and Northeast. We should see a larger amount of OFO’s and increased cost per MMBtu.   Those who are in a deregulated electricity market, be prepared for high hourly power cost during this cold snap.