Spreads

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

While large spreads of federal lands technically may be open for oil and natural gas exploration, producers still are prevented from drilling on them because of restrictions in their leases and a severe backlog of drilling permitting requests, the president of the American Petroleum Institute (API) said last week.