JAN 10 MARKET UPDATE

STORAGE REPORT
This week’s EIA storage report for the week ending January 8, 2010:
This week’s withdrawal of: 266 Bcf
Leaving this week’s balance at: 2852 Bcf
This week’s balance last year: 2749 Bcf
This week’s balance, 5-yr average: 2731 Bcf

Natural gas inventories are now 4.4% above the five year average.

THOUGHTS ON THE MARKET

Gas prices remained basically flat this past week in spite of a storage withdrawal of 266 Bcf that was just short of the all-time record of 274 from the week ending Jan 25, 2008. With the return of normal temperature supplies remain plentiful. Analysts predict another large withdrawal in this upcoming week’s report, with prices to keep falling in the near term.

Natural gas consumption is expected to remain at about the same level in 2010 while we should see a small increase in 2011. Crude oil prices fell for the sixth day this is the longest decline in a month.