2) Commodity Watch: Onward and Upward For Oil and Natural Gas.

• Natural Gas continue to seek levels that will entice imports to arrive at U.S. regas facilities. Summer heat and the more active portion of the Atlantic Basin hurricane season may conspire to get it over the $15 which my sense is would be enough to get noticed. Of course, Europe in the low $20s still takes precedence but perhaps some more shorter haul shipments (from the likes of Trinidad) could begin heading northwest.  

3) Rig Counts. Another new high for gas-directed rigs. Horizontal rigs may have inched lower this week but the outlook for increases in their deployment only improved with news items this week. We increased our exposure to the land drillers (again) this week. The second half of 2008 is likely to resemble the end of the hockey stick for activity and onshore dayrate pressures are mounting for both rigs, OCTG, completion services, etc. 

The Natural Gas Storage Review 

The EIA reported an injection of 85 Bcf into storage, I was at 80 to 85 Bcf, the Street was looking for 88 Bcf. Gas reacted somewhat positively to the news. 

Potential End Of Storage Season Outcomes. At present my back of the envelope math is leading me to think storage will end up in the 3.2 to 3.3 Tcfe range which is fairly bullish. We are passing the peak of injection season so unless a significantly cooler than expected Summer develops I'm not looking for a quick reduction to the YoY storage deficit. Not a lot more to add that I didn't already write in comments during the week. I may add a study or two as the weekend progresses.

Have A Great And Safe Fourth Of July Weekend!