NATURAL GAS INVENTORY: the EASTERN CONSUMING REGION BUILD SEASON (c) Leo Haviland May 13, 2013

Assuming normal weather, natural gas inventories in the United States Eastern Consuming Region at the end of the 2013 build season probably will range between roughly 2050bcf and 2100bcf. The midpoint of this range, 2075bcf, likely is about “normal” (average) for current United States supply and demand patterns.

Recall that end April 2012 Eastern Consuming Region peak working natural gas storage capacity for the region was 2219bcf. That total probably has been growing modestly since then. The Eastern Consuming Region therefore probably will not face a significant containment issue around the end of build season 2013, even if inventories reach around 2120bcf to 2135bcf.

The May 2013 STEO portrays how ECR year-on-year inventories from 1Q13 to 1Q14 catch up with and eventually surpass prior year levels. This is a bearish sign for gas prices.

Significantly, the 646bcf starting point for 2013 ECR inventory lurks a fair amount beneath the 733bcf average of the 2006-12 time frame. Consequently, the relatively low April 2013 ECR inventory total probably will be followed by a greater than average (relative to the 2006-12 vista) bcf increase.

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Natural Gas Inventory- the Eastern Consuming Region Build Season (5-13-13)