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 ...

div style="text-align: justify;"Morgan Stanley is upgrading span style="font-weight: bold;"Chesapeake Energy (NYSE:CHK)/span to Overweight from Equal-weight with a $34 tgt.br /br /CHK is levered to the 2010 recovery in natural gas prices; Morgan Stanley expects the shares to remain “gas beta” near term. Beyond their view of improving natural gas fundamentals, they see merit to CHK’s operating plan and expect the strategy to support outperformance. CHK is focusing on the lowest-cost US resource plays and has secured capital from partners to accelerate development. Firm sees improving capital efficiency and accelerating production and reserve growth in 2010/11 as a result. The market is concerned about follow through, and therein lies the opportunity. They see attractive relative valuation at a ~25% discount on 2010e unhedged EV/EBITDA and a ~18% discount to NAV at strip pricing.br /br /span style="font-weight: bold;"Two Aspects to Morgan Stanley's Call:/spanbr /span style="font-weight: bold;"br /I) Leverage to the recovery:/span CHK ...