Nat Gas - No Rest for the Weary

From EIA:

Working gas in storage was 3,821 Bcf as of Friday, October 29, 2010, according to EIA estimates. This represents a net increase of 67 Bcf from the previous week. Stocks were 37 Bcf higher than last year at this time and 353 Bcf above the 5-year average of 3,468 Bcf.

Bottom line: Seems to always be near the upper band of the range, doesn't it.  There is no relief in sight for natural gas.  All the shale drilling only adds to the problem as the initial production rates (unless significantly curtailed) are massive.  Continue to see no reason to be long this market, even at these low prices.

Pennsylvania Moritorium On Shale Gas!

On the wire:

HARRISBURG, Pa. - The governor of Pennsylvania has ordered a halt to new natural gas developments on state forest lands.

The Democratic governor's office said Monday that Gov. Edward Rendell would sign what was described as a "strategic moratorium" so Republicans, who control the state senate, would resume negotiations over a prospective tax on drilling.

He proclaimed the tax proposal dead last week, blaming legislative Republicans for what he described as their failure to offer a reasonable compromise on the rate — one of multiple issues that have stalled progress.

Less than a year ago, the state Department of Conservation and Natural Resources announced it was making nearly 13,000 hectares of state forest land available for leasing by gas drilling companies.

The Marcellus Shale region, a rock bed about beneath New York, Pennsylvania, West Virginia and Ohio, has produced a rush of exploration and land deals in the state, and could become the most valuable natural gas field in the United States.

Its production employs a process known as hydraulic fracturing, in which water and chemicals are pumped underground to create fissures in the rock and release the gas.

Watch how Nat Gas opens tomorrow, if it opens strong, think of it from the short side.  As is typical, the headline will make its way around, but not the body of the article.  This is a strategic political play, nothing more.  Sell to the greater fool, should he show up.