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Oil & Gas Journal

The surprise February increase in wet gas "suggests that dry gas production in February might be some 1.2 bcfd higher than [DOE's] Energy Information Administration's estimate of 54.5 bcfd. We believe that there are several good reasons to be cautious about jumping to conclusions about a jump in US gas production" said Sieminski.

Although the Rockies Express pipeline start-up in mid-January (now flowing about 1 bcfd) may be responsible for some of the February gains, the Independence Hub accident in mid-April is temporarily pulling 1 bcfd off the market, he noted.

Further more, said Sieminski, "A jump of 1 bcf in production from January to February seems very implausible in view of the leveling off of the rig count in the third quarter of 2007." He said, "Even if supplies did build consistently by 1 bcfd, that must have been offset by rising demand (or lower imports) because the supply-demand balances can be observed in the storage data, and that is inconsistent with a big supply jump."

The EIA reported May 1 the injection of 86 bcf of natural gas into US underground storage during the week ended Apr. 25. That put the amount of working gas in storage at 1.37 tcf, down 255 bcf from year-ago levels and 3 bcf below the 5-year average for the time of year.

US crude inventories shot up 3.8 million bbl to 319.9 million bbl in the week ended Apr. 25. US gasoline stocks fell 1.5 million bbl to 211.1 million bbl. US distillate fuel inventories gained 1.1 million bbl to 105.8 million bbl.

(Online May 5, 2008; author's e-mail: samf@ogjonline.com)