Update for Robry's latest data

In looking at the Robry data, the production has fallen to the lowest point in 09. We currently are at the same level of production as the week of July 11, 08. Given the steep decreases in drilling rigs, we have not seen the real decreases in production. Unless prices for natural gas rise quickly, we could see a sub 400 week in May. This would be lower than almost all weeks in 08.

Note that production often falls in April, but this year in addition to the normal seasonal effect, we have drilling rigs levels collapsing and completion levels collapsing even more. The result should be a dramatic fall in production from now till prices rebound. How low of production can we go? I do expect to see sub-400 levels of production before May. This would be much lower than last year's production.

Raymond James has the following quote: "our rig/production model doesn’t have U.S. gas supply down on a year-over-year basis until after June." Given Robry's data, I expect their will be days in March which YOY the production will be down. In April, I would expect there to be weeks where the production was down YOY. Last year production fell in April, so it will be hard to fall faster than the decrease last year, but without a doubt, we will NOT see the increases we did last summer. I predict that for the month of May 09, the production will be less than May 08. Raymond James has been out ahead of everyone on the large increases in production. And while I do not think the price of natural gas is going to rise to $10, I think any price below $3.50 is unsustainable and will cause production to fall to unacceptable levels.