Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

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Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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The United States natural gas Western Consuming Region, assuming normal weather, probably will end its 2013 build season with inventory around 520bcf to 575bcf. The middle of this range, 545bcf to 550bcf, resides above the 505bcf average peak of the past several years (2006-12) and hovers near 2012 build season’s 551bcf record plateau. Nevertheless, in general this region probably will not face a notable containment problem around the end of 2013 build season. However, containment challenges, even if unlikely, are not out of the picture, particularly if natural gas stocks build more than anticipated and if regional storage capacity has grown very little.

Given increased United States natural gas demand (and supply) since 2006, viewpoints regarding and estimates derived from “average” (normal, typical, desired), “high” and “low” gas inventories should emphasize the 2006-12 time period. However, the long run perspective beginning with 1994 remains relevant. See “US Natural Gas: the 2013 Build Up” (4/25/13), “US Natural Gas Inventory: the Producing Region Scenery” (5/6/13), and “Natural Gas Inventory: the Eastern Consuming Region Build Season” (5/13/13).

All else equal, an average inventory level at the commencement of build season tends to produce average builds. In the WCR as elsewhere in the United States, an elevated natural gas inventory total favors less than average inventory building (in the table above, see 2012 as well as 1995 and 1996 and arguably 2010). A relatively depressed WCR stock amount at the onset of build season encourages greater than normal inventory growth (1998, 2001, 2004, and 2008). Yet this guideline is not absolute, as 2000’s paltry inventory expansion occurred relative to a modest build season start (the 3/17/00 192bcf starting point was almost even with the 194bcf average of the preceding six years of 1994-1999).

FOLLOW THE LINK BELOW to download this market essay as a PDF file.
Natural Gas Inventory- the Western Consuming Region Build Season (5-20-13)