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Market gets knocked down, but it gets up again

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After falling for 5 consecutive days, the prompt month contract saw small rallies on 9/20 and 9/21. Still, the prompt month was down $.058/mmbtu on the week. The market has been range-bound of late, unable to sustain trading above $3.00 or below $2.75. The EIA’s report of a 67 bcf build into storage was mildly bearish, and the market initially fell. But as prices moved towards the $2.75 level, buying interest consolidated and the market ended the day higher.

After the report, total US storage now stands at 3,496 bcf, 320 bcf higher than last year. The surplus has been shrinking since the spring and is forecast to continue to shrink over the next two weeks, at least. Estimates for this weeks’ report call for a build in the upper 70’s, vs a build of 104 bcf last year. Early estimates for next week call for a build in the lower 70’s against a build of 101 bcf last year. Estimates for end of season storage are in the range of 3,950 bcf, about 100 bcf more than last year.

Posted: September 28, 2013