Last Thursday, we received a mildly bearish report from the federal government’s Energy Information Administration (EIA), showing a higher-than-expected rise in natural gas supplies. Stockpiles held in underground storage in the lower 48 states rose by 58 billion cubic feet (Bcf) for the week ended October 9. This takes the current storage level to a new all-time high of 3.72 trillion cubic feet (Tcf), which is up 13.8% from last year's level and 14.6% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 450 Bcf above last year’s level and 474 Bcf above the five-year average. The inventory addition was lower than the five-year-average injection of 64 Bcf and last year's build of 81 Bcf. The relentless increase in gas storage levels has meant that with three weeks remaining in the storage injection season, stockpiles ...

In its weekly release yesterday, the Energy Information Administration (EIA) reported a bigger-than-expected 69 billion cubic feet (Bcf) addition to natural gas stockpiles for the week ended October 2. This takes the current storage level to a new record high of 3.66 trillion cubic feet (Tcf), which is up 14.9% from last year's level and 15.1% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 473 Bcf above last year’s level and 480 Bcf above the five-year average. The inventory addition was lower than the five-year-average injection of 70 Bcf and last year's build of 87 Bcf.     The relentless increase in gas storage levels has meant that with four weeks remaining in the storage injection season, stockpiles are already 94% full. At this pace, by October 31, which is the end of the injection season, ...

Yesterday, we received a mildly positive report from the federal government’s Energy Information Administration (EIA), showing a less-than-expected rise in natural gas supplies. Stockpiles held in underground storage in the lower 48 states rose by 66 billion cubic feet (Bcf) for the week ended September 11. This takes the current storage level to 3.46 trillion cubic feet (Tcf), which is up 16.7% from last year's level and 16.4% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 496 Bcf above last year’s level and 487 Bcf above the five-year average. The inventory addition was lower than the five-year-average injection of 82 Bcf but slightly exceeded last year's build of 65 Bcf.     Overall, the relentless increase in gas storage levels continue to add to the long list of issues weighing on the commodity. At this pace, ...

In its weekly release yesterday, the Energy Information Administration (EIA) reported a less-than-expected 69 billion cubic feet (Bcf) weekly addition to natural gas stockpiles for the week ended September 4. This takes the current storage level to 3.39 trillion cubic feet (Tcf), which is up 17.1% from last year's level and 17.4% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 495 Bcf above last year’s level and 503 Bcf above the five-year average.     The inventory addition was higher than last year's build of 63 Bcf and the five-year-average injection of 67 Bcf. The relentless increase in gas storage levels continue to add to the long list of issues weighing on the commodity. At this pace, inventories are on course to surpass the all-time high level of 3.57 Tcf recorded at the end of October ...

Yesterday, in its weekly release, the federal government’s Energy Information Administration (EIA) reported another rise in natural gas supplies. Stockpiles held in underground storage in the lower 48 states rose by 65 billion cubic feet (Bcf) for the week ended August 28. This takes the current storage level to 3.32 trillion cubic feet (Tcf), which is up 17.3% from last year's level and 17.8% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 489 Bcf above last year and 501 Bcf above the five-year average.     The inventory addition was smaller than last year's build of 92 Bcf but exceeded the five-year-average injection of 64 Bcf. The relentless increase in gas storage levels continue to add to the long list of issues weighing on the commodity. At this pace, inventories are on course to surpass the ...

In its weekly release yesterday, the Energy Information Administration (EIA) reported a bigger-than-expected 54 billion cubic feet (Bcf) weekly addition to natural gas stockpiles for the week ended August 21. This takes the current storage level to 3.26 trillion cubic feet (Tcf), which is up 18.8% from last year's level and 18.1% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 516 Bcf above this last year and 500 Bcf above the five-year average.       The build was smaller than last year's 100 Bcf build and the five-year-average injection of 67 Bcf. However, the relentless increase in gas storage levels continue to add to the long list of issues weighing on the commodity. Natural gas prices rallied earlier last year, reaching over $13 per million Btu (MMBtu) in July 2008, before trending down. Prices have since dropped ...

Earlier this week, Texas-based independent oil and gas player XTO Energy (XTO) updated its price hedges for future sales of oil in 2010. The company has now hedged approximately 95% of its projected 2010 oil production at an average price of $95.70 per barrel.

On the natural gas front, XTO has hedged approximately 730 million cubic feet per day (MMcf/d) at an average price of $8.67 per million cubic feet equivalent (Mcfe). The company has already hedged the bulk of this year's volumes at very attractive price points: nearly 80% of its expected natural gas volumes at an equivalent price of $8.79 per Mcfe and more than 75% of its expected liquids volumes at $117.11 per barrel.

We believe this would smooth out the commodity price risk for XTO. As such, the company remains better positioned than most of its peers to operate in the current low

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Highlights include Nabors Industries Ltd. (NBR), Patterson-UTI Energy, Inc. (PTEN), BJ Services Co. (BJS), EnCana Corp. (ECA), EOG Resources, Inc. (EOG) and Chesapeake Enery Corp. (CHK).Growing optimism about the economic outlook has pushed the equity markets significantly higher from the March 2009 lows. Crude oil and most of the other commodities have been active participants in the rally.As this first chart shows, natural gas has largely been absent from this rally. In fact, natural gas prices have been particularly weak in the last couple of days, erasing the gains made in the preceding three weeks and pushing the commodity back under the $4 level.  Blue line: Oil; Red line: Natural Gas (Source: wsj.com) This decoupling of natural gas prices from other commodities in general and crude oil in particular is rooted ...

EnCana Corp.'s (ECA) better-than-expected first-quarter 2009 results were driven by robust production growth and strong cost controls. Natural gas production was up 4% to 3.9 Bcf/d, strongly positioning the company to achieve full-year guidance.EnCana also benefited from lower operating costs. We continue to like the company for its industry-leading inventory of long-lived unconventional oil and gas assets. Additionally, EnCana remains focused on capital discipline and free cash flows.With about two-thirds of its volumes this year hedged at very attractive price points, the company is expected to generate around $1.6 billion in free cash flows. Keeping in view the company's year-end 2008 proved reserves and upside potential from unbooked resources, our per share net asset value estimate comes to $64.60. Our new $64 price objective, raised from $54 before, is at approximately 100% of our NAV [net asset value] estimate. Read the full analyst ...

With oil finally trading back above the $50-a-barrel level, it’s time to recognize that crude prices are probably not going to remain low for very long, and may end up fluctuating in the $50-$80 range - regardless of what happens to the prices of other commodities. After all, the economies in both China and India are apparently continuing to grow at a fairly rapid pace, and those countries’ demand for transportation and other forms of energy are thus likely to keep pace. For some minerals, the period of high prices from 2005 to 2008 has produced a surplus. But no such effect has been seen in the oil market, as large new discoveries are hard to find. If we’ve learned anything in the last few years, it’s that political risk is very important in oil investments. It’s not just a question of outright ...