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Daily Gas Flows (Comments)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

MODELING NOTE: Several models remain down due to personal family issues (over the past couple years) that previously
crimped back on my work. Though improving, I remain somewhat time constrained on both posting and modeling updates.
I normally have a small backlog of modeling updates, but that backlog swelled and while being worked through now, it still is
at a point where some modeling (including industrial-side economics and especially natgas production) is hampered by the
backlog.

This has only a very minor impact on natgas storage modeling, and in no way impacts climate modeling, or degree/day modeling,
It does affect natgas production modeling the greatest, so that model is especially flagged as such in its "Part 6" post. The
Generation Model also looks to be underestimating.

MICRO-ECONOMICS: We are now in the midst of Retooling Season (First two weeks of July), waiting to see what emerges
as the "new economy" once we get past the weekend. We should get a good glimpse in next weeks posts.

There is a political angle to all of this... when the Nation elected Donald Trump to the US presidency, a major factor was Trumps
goal of international trade imbalancing, and an awful lot has been happening behind the scenes (out of the public eye) in this regard.
Will a very aggressive retooling season herald expanded production from model lines once Retooling Season draws to a close in the
manufacturing center?

In my own thinking, I carry a curiosity as to what might be about to happen. Maybe no big deal, maybe a shockingly-big deal. But
whatever, watch closely what emerges starting next week. It could be market-changing.

In the present week, Food-group scheduling remains extremely bullish (best tell on underlying economic strength), the Consumption
Index continues its rise unabated, but the Industrial Index is drifting in the blindness of Retooling Season.

The industrial index (red-hot since the elections) drifted sideways to match last weeks 146.3. Its record high is just above at 146.9
(touched last on June 3rd).

The consumption index climbs to 226.3 from 225.4 last week, well above its May 18th low of 207.7 (that likely rattled world economics
and caused the recent CL slide). The index remains well below its 237.1 all-time high (August 13th, 2015).

While this weeks numbers remain healthy, keep in mind that we are looking only at the very-short term here in an economy that
can change on one news report or one political speech.

..............................................................--28.week.avg---.........---Daily.(Raw)---.........Daily
...........................................................Industrial..Personal.....Industrial..Personal.......Food
.....................................Dailies..............Prod'n.....Cons'n.........Prod'n.....Cons'n.......Group
...................................06/12/17.............146.8........221.5...........2.290.......48.04........47037
...................................06/13/17.............146.7........221.8...........2.206.......47.74........49028
...................................06/14/17.............146.7........221.9...........2.265.......47.71........49457
...................................06/15/17.............146.7........221.8...........2.245.......47.71........51805
...................................06/16/17.............146.8........221.6...........2.238.......48.11........52243
...................................06/17/17.............146.7........221.5...........2.201.......48.11........50224
...................................06/18/17.............146.6........221.4...........2.203.......48.11........52034
...................................06/19/17.............146.4........221.3...........2.209.......48.11........50334
...................................06/20/17.............146.4........221.6...........2.261.......47.71........50698
...................................06/21/17.............146.4........222.2...........2.217.......49.25........47844
...................................06/22/17.............146.4........223.3...........2.261.......51.65........46714
...................................06/23/17.............146.2........223.9...........2.197.......48.20........50645
...................................06/24/17.............146.1........224.1...........2.225.......48.19........50246
...................................06/25/17.............146.0........224.0...........2.204.......48.19........52118
...................................06/26/17.............145.9........224.4...........2.187.......48.19........48460
...................................06/27/17.............145.9........224.5...........2.217.......49.78........51480
...................................06/28/17.............145.9........224.5...........2.231.......48.30........49653
...................................06/29/17.............145.8........224.7...........2.195.......47.62........49655
...................................06/30/17.............145.8........225.0...........2.261.......49.58........51868
...................................07/01/17.............145.9........225.1...........2.286.......48.34........48958
...................................07/02/17.............146.0........225.3...........2.288.......48.34........50638
...................................07/03/17.............146.1r.......225.4...........2.300.......48.34........48857
...................................07/04/17.............146.2........225.4...........2.280.......48.34........48749
...................................07/05/17.............146.2........225.5...........2.257.......48.34........49002
...................................07/06/17.............146.3........225.5...........2.273.......48.34........49691
...................................07/07/17.............146.2........225.5...........2.292.......47.93........51006
...................................07/08/17.............146.2........225.6...........2.276i......48.42i.......49917i
...................................07/09/17.............146.1........225.6...........2.272i......48.42i.......52161i
...................................07/10/17.............146.1........225.7...........2.277i......48.42i.......50321i
...................................07/11/17.............146.2........226.0...........2.286i......48.42i.......51019i
...................................07/12/17.............146.3i.......226.3i..........2.302i......47.95i.......51344i

MACRO-ECONOMICS: In the intermediate term, we are embroiled in an economic sea-change brought about by the election of President
Trump. Immediately following the November Elections, Optimism was brought to the industrial and investment sides of the economy. For
the consumption side however, the economy was initially pressured by the political side (consumption tends to be more sympathetic towards
Democrats while industry and investment tend to be more sympathetic towards Republicans).

............................................................Industrial...........Personal
..........................................................Production......Consumption
...................................11/05/16.............139.2.................226.0
...................................11/12/16.............139.6.................222.6
...................................11/19/16.............140.6.................221.9
...................................11/26/16.............141.9.................222.2
...................................12/03/16.............141.3.................229.6
...................................12/10/16.............141.7.................220.6
...................................12/17/16.............142.3.................220.5
...................................12/24/16.............142.6.................221.4
...................................12/31/16.............143.1.................217.5
...................................01/07/17.............144.4.................215.9
...................................01/14/17.............144.6.................213.8
...................................01/21/17.............144.8.................212.5
...................................01/28/17.............145.4.................216.7
...................................02/04/17.............144.9.................215.2
...................................02/11/17.............144.3.................214.3
...................................02/18/17.............143.6.................212.5
...................................02/25/17.............142.6.................212.1
...................................03/04/17.............141.7.................213.6
...................................03/11/17.............141.3.................214.4
...................................03/18/17.............141.5.................218.1
...................................03/25/17.............142.3.................219.9
...................................04/01/17.............143.1.................221.2
...................................04/08/17.............144.4.................223.7
...................................04/15/17.............144.2.................222.8
...................................04/22/17.............143.8.................219.5
...................................04/29/17.............144.3.................211.4
...................................05/06/17.............144.0.................210.5
...................................05/13/17.............145.2.................208.8
...................................05/20/17.............146.5.................213.5
...................................05/27/17.............146.6.................217.1
...................................06/03/17.............146.8.................217.5
...................................06/10/17.............146.7.................220.4
...................................06/17/17.............146.7.................221.5
...................................06/24/17.............146.1.................224.1
...................................07/01/17.............145.9.................225.1
...................................07/08/17.............146.2.................225.6

Recently however, personal consumption began to lift back, and is now (on the dailies) 3 ticks higher from where it all began post Trump
(and on top of a very-bullish slump in food-group scheduling, which is historically counter-indicative meaning economic strength).

In the chart above, note how the industrial column has progressed higher above, while the consumption column progressed lower through.
to its ultimate May-13th low. That type of progression (climbing industrial production concurrent with declining personal consumption) was
indicative of three very important developments:

First, the decline in personal consumption is indicative of of a global slowdown, about 7 1/2 percent between the November 2016 elections
and the May 13th bottom.

Second, the rise in industrial production (when taken against the decline in personal consumption) was an indication that the US economy
was effectively insulated against that global slowdown. Instead of sliding with the globe, the US economy (in terms of corporate earnings and
wages) likely expanded about 4 1/3 percent by May 13th... but only on the US industrial side. Retail in the US was down about 7 1/2 percent
as well from the November elections through May 13th.

Third, pressure on the twin deficits (US balance of payments and US Budget) is easing.

Industrial Production, traditionally more sensitive to the Republican side, understandably rallied in response to the Trump win, and has
been overall firm with only a short pause in February and early-March.

Personal Consumption, traditionally more sensitive to the Democratic side, understandably was choppy and soft in response to the Trump
win. Historically (before the Trump Presidency), the consumption side normally lead the industrial side.

Before Trump, I tended to put more emphasis on consumption side (and its divergence to industrial production) and less emphasis on the
industrial side. The pre-Trump years represented a consumer-driven economy where consumption lead industrial production around
like a dog on a leash. Anything that would turn consumption, a few days later, would turn industrial production, then the markets. It was a
great trade for an investor. But no more.

Post Trump, we appear to be in an industrial economy, where recapturing of trade is elevating the economy by injecting more industrial
jobs and wages into it. Corporate revenues will rise as manufacturing trickles home. Tax revenues will rise as corporate revenues rise.

And now, the Industrial Index has now turned the consumption index... something that has rarely been seen in the entire history of these
indices, going back all the way back to 2004, and never been seen to this extent.

There is good reason why weak economies around the globe benefited from their export-driven economies. And there is good reason why
the import-driven US economy has been so phlegmatic. The mathematics are simply not on the side of the import-economy. The consumer
may get a temporary high from the foreign incentivisized dumping, but the wage-losses on the industrial side far outweighs that when it comes
to payrolls.

The Federal Reserve previously began what looks to be a quarterly program to raise interest rates, with the first round in December, the
second round in March, and the third in June. With the US economy looking insulated by way of returning manufacturing, was the Federal
Reserve really aiming its guns at the global economy, to make room for a resurgent US at the expense of global economics?

Though the US economy has obviously trended a little bit away from an overwhelmingly import-based economy, it is still the equivalent
of the baseball first-inning. It will take a long, long time to eat away the massive monthly trade-related liquidity outflows that so damage
the US economy, and as the US has effectively insulated itself against the 2017 global slowdown, the US is probably effectively insulated
against the Federal Reserve as well, at least for the time being, and what damage the Federal Reserve does now likely goes straight to the
non-US side of the globe.

GLOBAL ECONOMICS: For world Markets... the implied switch toward US industrial production that is evidenced in the gas flows since the
Trump election implies a switch away from foreign industrial production, and there is strong assumption that the worlds non-US economies
were under pressure through mid-May as a result. In the US it is becoming a little more trendy buy "Made-in-the-US" products rather than
foreign.

Post-May, a resurgent US consumption will help global economics (as trade rebalancing has only just begun), at least it will as long as it
lasts. However, as trade-balancing progresses, there will be a constant bleed within non-US economies... just as there was a constant bleed
within the US economy when its imports ballooned through the last two decades. Foreign economies therefore will have to be vigilant to
avoid the consequences that the US collected for itself during those years.

As the Trump administration pushes forward on its campaign of trade balancing against nations with large trade-surpluses into the US, those
trade flows will be pressured. As this progresses, global recession or worse (should US trade-demand abate) endangers those foreign
economies, and that part of their manufacturing base that is not represented by internal demand will be at great risk.

In a Trump world (and post-Trump world) the continual practice of dumping product into the US (in return for US liquidity infusions to foreign
central-reserve banks) is at some point going to fail. If Trump (or a successor) does not fix it, the markets will eventually fix it themselves,
and in a way none will like. Rising US debt is building a global bubble.

The answer (for foreign nations that are addicted to export in exchange for cash) is to self-stimulate their own economies, to allow their own
citizens to afford to purchase the works of their own hands.

US cash (in a central bank) is no alternative for gold, and no alternative for diversification. If the US dollar collapses (due to uncontrolled
debt accumulation breaking global US dollar confidence) the risk to central banks that have accumulated great hordes of US dollars will be
as substantial to those foreign nations as the risks to the US itself.

NATGAS: Last weeks reported EIA injection (72 BCF) favored the EIA-weighted model (65 BCF) over the capacity model (82 BCF), for the
fourth week in a row. Baseline was 86 BCF, scoring the EIA report as 14 BCF to-the-bullish.

This weeks (Thursday) EIA report looks to be smaller on climate. EIA-weighted model says 51 BCF injected, capacity model 62 BCF. Baseline
will be for a 69 BCF injection, scoring the two models estimates as 18 BCF and 7 BCF to-the-bullish respectively.

Next weeks EIA-weighted model count is just 24 BCF and running, Capacity Model 34 BCF, but on much stronger (bullish) baseline scores.

Following weeks injection (on end of retooling and coming forecast heat) could be nearly nearly nothing.

......=========================US Gas Flow Models (US storage injections, in BCF, as of 9AM)==========================
.........Week.....------------------Composite.Model-----------------------------...Capacity....EIA.........EIA......Baseline.......------EIA------.....Capacity.Model
......_Ending___Sat__Sun__ Mon__Tue__Wed__ Thr___Fri___Total___Model__ Model__Actual__(Neutral)___YOY__YO5YA__YOY__YO5YA
......06/16/17....10.8....11.8....10.8......8.4......6.7......6.4......6.0......61.0..........65..........60..........61............72..............-324........203......-256.........-83
......06/23/17......5.7......7.5......8.4......7.3......5.9......5.8......5.3......46.0..........61..........44..........46............70..............-325........175......-244.........-99
......06/30/17....10.7....12.3....11.9....10.9....10.0......8.4......7.7......72.0..........81..........65..........72............86..............-284........184......-215.........-85
......07/07/17......6.7....10.1......6.9......7.4......8.8......5.6......5.6......51.1..........62..........51..........................69..............-297........160......-227.........-97
......07/14/17......5.0......5.9i.....6.0i.....4.1i......2.4i.....1.9i....-1.1i.....24.2i.........34i..........24i...........................................-303........140......-234i......-107i

DAILY GLOBAL WARMING MODEL: The models remain split (as last week) on hemispheric effect, with the northern hemisphere models all showing
hemispheric warming while the southern models show hemispheric cooling. Globally, the earth is experiencing only slight warming.

In regards to total northern hemisphere frozen inventory, there are 200,000 square miles more than last year, putting the northern hemisphere's chances
of a summer more like 2015 than 2016 (last year). That is, we have 200,000 square miles more of exposed frozen water (in some form) to dissipate
heat (as it melts).

The presence of sea-ice (along with snow-pack and icecap) in the summer acts as a heat-sink, with the melting ice dissipating the heat build-up that
would otherwise occur as the result of sunlight relentlessly striking the sun-ward-poll during summer. My own stance is that it is the surface of frozen
water (square miles) and not the volume (cubic miles) that matters, as it is the exposed part of frozen inventory (as it melts in the sunlight and heated
air) that dissipates heat.

Thus, should frozen inventory (in square miles) be five percent less than the prior year, the ability of that hemisphere to dissipate heat is assumed to
be lessened five percent as well, allowing more hemispheric heat to go undissipated to feed a hot summer.

That effect is of course reversed (though parallel) in winter as open seawater releases heat upon freezing, which mitigates the coldness of winter.

In my own mind, I question whether this is the basis of ice ages... whether periods of glaciation expanse are more a product of a loss of open water
(rather than severely colder winters) which impedes mitigation of heat loss in winter. At least, it fits better with the modeling. Of course if that opinion
is right... if a hemisphere should loose all of its ice at any time before summer, than that hemisphere becomes a hell-on-earth in summer where
temperatures could go above the boiling point to find the next point where summer heat can be massively mitigated, or the thickening of the atmosphere
to the point that more sunlight can be reflected back into space to mitigate summer heat. Mine is a very radical view.

..............................========================================Estimate of Changes to Global Sea Ice Inventories (Square Miles)=========================================
..............................------------------------------------Northern Hemisphere------------------------------------................-------------------------------------Southern Hemisphere------------------------------------
......................................................................................................................Net Effect Of.........................................................................................................................Net Effect
..............................----------Sea Ice Inventory----------....................................Hemispheric...............................----------Sea Ice Inventory----------.....................................Hemispheric
...................................Two............One...............................Net.........................Cooling.......30-Day.......................Two...........One................................Net.........................Cooling........30-Day
......____________Years Ago_ Year Ago__Present___Change__Baseline_(Warming)__Average________Years Ago_ Year Ago__ Present___Change__Baseline_(Warming)__ Average
......07/04/17............2137431....1997741....2008039.......-14124.......-16989..........2864........-2517...................3568426....3304578....3157677........19870........16390..........3480..........1052
......07/05/17............2123538....1981481....1999635.........-8404.......-16687..........8282........-2202...................3587685....3330572....3182086........24409........15974..........8434..........1172
......07/06/17............2094062....1960714....1976316.......-23318.......-16727........-6591.........-2317...................3596954....3381058....3206099........24013........15636..........8376..........1356
......07/07/17............2067213....1945544....1953164.......-23151.......-17039........-6112.........-2382...................3610463....3420161....3223393........17294........15386..........1907..........1166
......07/08/17............2047075....1928745....1945412.........-7752.......-17405..........9652........-1920...................3628526....3438831....3238288........14895........15346...........-451............806
......07/09/17............2021431....1909826....1941371.........-4040.......-17607........13567........-1206...................3644723....3455224....3239539..........1251........15490.......-14239..............70
......07/10/17............1999793....1891967....1918027.......-23344.......-17745........-5598.........-1176...................3659266....3473609....3253573........14033........15573.........-1540............397

......Minimum............................(09/11/12).....928478............................................................................................................(03/03/11)....764252
......Maximum...........................(02/25/98)...3585826............................................................................................................(09/20/14)..4334299

Today's refining numbers...

...................................Scheduling.............................Scheduling.............................Scheduling.............................Scheduling.............................Scheduling.............................Scheduling.............................Scheduling.............................Scheduling
...............Weeklies......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)..........Weeklies.......(MMCF/D)
...............12/27/13............451...............06/27/14............397...............12/26/14............444...............06/26/15............376...............12/25/15............459...............06/24/16............384...............12/23/16............461...............06/23/17............443
...............01/03/14............447...............07/04/14............394...............01/02/15............448...............07/03/15............382...............01/01/16............450...............07/01/16............389...............12/30/16............459...............06/30/17............408
...............01/10/14............429...............07/11/14............403...............01/09/15............431...............07/10/15............399...............01/08/16............438...............07/08/16............394...............01/06/17............457...............07/07/17............442
...............01/17/14............441...............07/18/14............382...............01/16/15............428...............07/17/15............405...............01/15/16............437...............07/15/16............411...............01/13/17............454...............07/14/17............425i
...............01/24/14............420...............07/25/14............379...............01/23/15............419...............07/24/15............399...............01/22/16............441...............07/22/16............411...............01/20/17............461
...............01/31/14............392...............08/01/14............438...............01/30/15............415...............07/31/15............398...............01/29/16............424...............07/29/16............417...............01/27/17............460
...............02/07/14............411...............08/08/14............419...............02/06/15............425...............08/07/15............395...............02/05/16............437...............08/05/16............409...............02/03/17............437
...............02/14/14............419...............08/15/14............412...............02/13/15............435...............08/14/15............390...............02/12/16............458...............08/12/16............405...............02/10/17............463
...............02/21/14............442...............08/22/14............381...............02/20/15............420...............08/21/15............373...............02/19/16............441...............08/19/16............401...............02/17/17............477
...............02/28/14............410...............08/29/14............384...............02/27/15............428...............08/28/15............384...............02/26/16............468...............08/26/16............417...............02/24/17............458
...............03/07/14............438...............09/05/14............395...............03/06/15............446...............09/04/15............394...............03/04/16............467...............09/02/16............426...............03/03/17............415
...............03/14/14............431...............09/12/14............387...............03/13/15............447...............09/11/15............413...............03/11/16............449...............09/09/16............414...............03/10/17............424
...............03/21/14............452...............09/19/14............390...............03/20/15............445...............09/18/15............402...............03/18/16............447...............09/16/16............406...............03/17/17............459
...............03/28/14............452...............09/26/14............380...............03/27/15............435...............09/25/15............379...............03/25/16............440...............09/23/16............418...............03/24/17............438
...............04/04/14............431...............10/03/14............382...............04/03/15............453...............10/02/15............386...............04/01/16............439...............09/30/16............419...............03/31/17............441
...............04/11/14............426...............10/10/14............385...............04/10/15............467...............10/09/15............390...............04/08/16............366...............10/07/16............432...............04/07/17............458
...............04/18/14............458...............10/17/14............387...............04/17/15............448...............10/16/15............395...............04/15/16............397...............10/14/16............446...............04/14/17............415
...............04/25/14............420...............10/24/14............380...............04/24/15............442...............10/23/15............406...............04/22/16............374...............10/21/16............418...............04/21/17............400
...............05/02/14............383...............10/31/14............426...............05/01/15............428...............10/30/15............428...............04/29/16............413...............10/28/16............400...............04/28/17............428
...............05/09/14............397...............11/07/14............354...............05/08/15............404...............11/06/15............424...............05/06/16............416...............11/04/16............431...............05/05/17............413
...............05/16/14............404...............11/14/14............416...............05/15/15............411...............11/13/15............452...............05/13/16............420...............11/11/16............444...............05/12/17............430
...............05/23/14............415...............11/21/14............456...............05/22/15............426...............11/20/15............467...............05/20/16............424...............11/18/16............464...............05/19/17............449
...............05/30/14............405...............11/28/14............463...............05/29/15............406...............11/27/15............465...............05/27/16............411...............11/25/16............472...............05/26/17............435
...............06/06/14............400...............12/05/14............446...............06/05/15............402...............12/04/15............459...............06/03/16............400...............12/02/16............469...............06/02/17............437
...............06/13/14............399...............12/12/14............426...............06/12/15............409...............12/11/15............446...............06/10/16............399...............12/09/16............456...............06/09/17............425
...............06/20/14............401...............12/19/14............439...............06/19/15............379...............12/18/15............455...............06/17/16............383...............12/16/16............473...............06/16/17............421

...................................Scheduling....Weeks
................Dailies......... (MMCF).........Avg

...............06/10/17.(w)......447
...............06/11/17.(w)......443
...............06/12/17............436
...............06/13/17............390
...............06/14/17............394
...............06/15/17............405
...............06/16/17............430.............421

...............06/17/17.(w)......432
...............06/18/17.(w)......434
...............06/19/17............436
...............06/20/17............446
...............06/21/17............452r
...............06/22/17............450r
...............06/23/17............447.............443

...............06/24/17.(w)......447
...............06/25/17.(w)......438
...............06/26/17............425
...............06/27/17............367
...............06/28/17............374
...............06/29/17............366
...............06/30/17............437.............408

...............07/01/17.(w)......445
...............07/02/17.(w)......444
...............07/03/17............442
...............07/04/17............440
...............07/05/17............440
...............07/06/17............428
...............07/07/17............454.............442

...............07/08/17.(w)......416i
...............07/09/17.(w)......423i
...............07/10/17............418i
...............07/11/17............443i............425i
...............(w) = weekend (Saturday/Sunday)