After completing a week that saw a drawn-out, cross-country heat wave and production losses due to Tropical Storm Barry, Lehman Brothers’ Thomas Driscoll said it is “likely” that this week’s natural gas storage announcement could provide the lowest gas injection rates since April. He estimates that this week’s storage report will reveal total injections last week of about 65 Bcf — 10 Bcf lower than the company’s previous estimate.

Driscoll attributes half of the estimated reduction to Barry and half to the surprising strength of last week’s heat wave. The 65 Bcf injection estimate compares with an injection of 52 Bcf a year ago. “We estimate that 5-6 Bcf or production was ‘lost’ as a result of production shut downs for safety/operational reasons as Barry approached,” Driscoll said in his weekly injection forecast. “However the relief for gas bulls may be brief, as we expect storage injection rates to return to high levels next week.”

With extreme heat affecting much of the country last week, there were 25% more Cooling Degree Days (CDD) than normal. So far this summer, Driscoll said the nation has experienced 4% more air conditioning customer weighted CDDs than last year and 9% more than normal. Last week air conditioning customer-weighted CDDs were 100 — seven higher than his previous estimate of 93, and compared to 90 last year and 80 normally, the analyst said.

With Barry over, and temperatures cooling off some, Driscoll said this week’s storage injections will elevate back up to levels that have been seen in the past few weeks. He said he expects next week’s announcement of this week’s totals to show an injection of about 90 Bcf compared to an injection of 55 Bcf a year ago. NOAA estimates cooling degree days will be 67 this week vs. 76 normally and 75 last year.

“We expect the year-over-year storage surplus to increase from 298 Bcf as of 8/3/01 to 311 Bcf (estimated injection of 65 Bcf vs. an injection of 52 Bcf a year ago) for the week ended August 10,” the Lehman Bros. analyst added.

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