NYMEX Reaches 10 Year Low

The February Gas futures contract settled another 15 cents lower yesterday at $2.32/MMBtu, the lowest a prompt-month has settled since February 25, 2002.  

The large drop came after the EIA released yet another storage report showing supply levels over 500 Bcf higher than they were last year at this time.

The February gas futures contract is currently still trading at $2.32/MMBtu, equal to its settlement yesterday. By comparison, the 12 month strip is trading at $2.73/MMBtu and this year's winter strip (Feb 12 - Mar 12) is trading at $2.35/MMBtu.

Keystone XL Pipeline Rejected

The highly anticipated, $7 Billion, 1,700 mile Keystone XL pipeline project that would bring oil from oil sands in Canada all the way down to the Gulf Coast in Texas and Louisiana was rejected by the Obama administration on Wednesday.

Although originally filed in January 2008, according to the President, "This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people."

Although this initial application for the permit has been denied, the administration will allow TransCanada to re-apply for the permit after it develops an alternate route that avoids the Nebraska Sandhills, a region with a sensitive habitat that may be affected by the pipelines construction.

Storage

Working gas in storage was 3,290 Bcf as of Friday, January 13, 2012, according to EIA estimates. This represents a net decline of 87 Bcf from the previous week.

Stocks are still 539 Bcf higher than last year at this time and 566 Bcf above the 5-year average.

Weather

The weather this weekend is expected to be relatively cold with temperatures not exceeding 25 degrees until Sunday afternoon, with a few snow showers along the way.