Game of Thrones references aside, winter IS on its way here and we could see a normal winter - the kind with snow - bring gas back to $4.00-$4.50/Mcf. Natural gas prices are highly dependent on what kind of winter we have going forward and if we have a warm one like we did in New York last year, expect natgas prices to fall further.
Currently, inventories are 9% above “normal” (we used the 2006 – 2010 average); the chart below makes a compelling argument for $4.00 - $4.50/gas should we get a normal/colder winter and inventories continue to decline to a “normal level.” That would imply upside the winter strip, which is sub-$4.00.
