In March 2013, BENTEK projected storage levels to fall below the five-year average.
Although late winter cold has been the main cause behind the tighter natural gas market in March 2013, there has been significant uncertainty about the exact reasons for recent higher-than-expected storage withdrawals which sent the April futures contract past $4 on March 21.
Some analysts have speculated that gas-directed drilling declines may finally be leading to a downward shift in gas production, and that has forced greater storage withdrawals. Others are looking for a demand explanation.
Market Madness: Aggressive Demand Breaks Price Brackets explores the storage, production and demand trends that influenced the price of gas in winter 2013 and the NYMEX forward curve. This Market Alert also projects how supply will behave this summer in a higher price environment and what these fundamentals means for the upcoming summer cooling season.