Forecasting another strong storage refill total for this week despite Hurricane Claudette’s shut-ins, Stephen Smith Energy Associates sees the natural gas storage deficit continuing to drop and pressures continuing to move prices down.

The analyst predicts the Energy Information Administration (EIA) storage fill number to be announced Thursday for last week will be 91 Bcf, or “14 Bcf more than our ‘normal’ seasonal build of 77 Bcf expected for this week (based on our ’94-’98 reference period).”

That would cut the seasonal storage deficit relative to the reference period norms by 14 Bcf, from a deficit of 204 Bcf to a deficit of 190 Bcf. “Assuming current prices and normal weather going forward, this pace of deficit reduction suggests that the storage deficit could be eliminated in less than two months (rough guess since prices change).”

The Stephen Smith group notes the gas-to-resid price index has decreased by 30% from its peak June 6 and is within 2-3% of its average level for last December/January, a factor which should cause increased gas demand in the next few weeks. The campaign to fill storage is not expected to suffer, however.

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