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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: The consumption-side's softness (on the dailies) reversed on the 1st, leading to a bottoming on the
consumption index on the 5th. Industrial side still slipping, food-group scheduling still saying forget the softness were bullish.

The industrial index (red-hot since the elections) backtracked from last weeks 145.4 to 144.0 in its latest read. Its record high was
146.9 (touched last on June 3rd), and it is working on a string of 15 daily declines in a row.

The consumption index climbs from 214.1 to 214.5 in its latest read. On the dailies, there was a notable ~10% reduction around
the 22nd (Saturday) that reversed August 1st, which made me wonder all the fuss was just a summer-vacation anomaly. Food-group
scheduling never did agree with the softness.

The consumption index previously had slumped as low as 207.7 (On May 18th) and remains well below its 237.1 all-time high
(August 13th, 2015).

While this weeks numbers remain supportive, 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
...................................07/09/17.............146.1........225.6...........2.272.......48.42........52161
...................................07/10/17.............146.1........225.7...........2.280.......48.42........50321
...................................07/11/17.............146.2........226.0...........2.299.......48.42........51112
...................................07/12/17.............146.2........226.3...........2.273.......47.95........51581
...................................07/13/17.............146.3........226.7...........2.299.......47.88........50609
...................................07/14/17.............146.4........226.6...........2.310.......47.48........54165
...................................07/15/17.............146.4........226.5...........2.277.......47.47........50162
...................................07/16/17.............146.5........226.2...........2.275.......47.47........53667
...................................07/17/17.............146.6........225.9...........2.260.......47.47........54248
...................................07/18/17.............146.5........225.6...........2.194.......47.47........51059
...................................07/19/17.............146.5........224.9...........2.211.......47.44........49647
...................................07/20/17.............146.4........223.7...........2.174.......47.44........55056
...................................07/21/17.............146.4........222.7...........2.233.......46.02........55753
...................................07/22/17.............146.5........221.8...........2.247.......43.53........52866
...................................07/23/17.............146.6........221.0...........2.270.......43.90........54430
...................................07/24/17.............146.6........220.2...........2.240.......43.90........49720
...................................07/25/17.............146.5........219.4...........2.189.......43.81........50907
...................................07/26/17.............146.5........218.4...........2.228.......43.22........49172
...................................07/27/17.............146.4........217.4...........2.190.......43.41........50454
...................................07/28/17.............146.3........216.5...........2.202.......42.66........48865
...................................07/29/17.............146.1........215.8...........2.204.......42.66........46552
...................................07/30/17.............145.9........215.2...........2.206.......42.65........47634
...................................07/31/17.............145.7........214.4...........2.241.......42.65........46044
...................................08/01/17.............145.5........214.2...........2.229.......42.79........47787
...................................08/02/17.............145.4........214.1...........2.231.......47.79........47974
...................................08/03/17.............145.3........214.0...........2.232.......47.96........51187
...................................08/04/17.............145.1........213.9...........2.198.......47.96........51050
...................................08/05/17.............144.8........213.9...........2.120i......48.55i........47814i
...................................08/06/17.............144.6........214.3...........2.151i......49.95i........49112i
...................................08/07/17.............144.4........214.3...........2.166i......48.55i........47742i
...................................08/08/17.............144.0i.......214.5i..........2.109i......50.69i........50519i

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
...................................07/15/17.............146.4.................226.5
...................................07/22/17.............146.5.................221.8
...................................07/29/17.............146.1.................215.8
...................................08/05/17.............144.8.................213.9

Up until two weeks ago, however, personal consumption lifted back up to near 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 recently, 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 (20 BCF) favored the EIA-weighted model (22 BCF) over the capacity model (46 BCF).
Baseline was 51 BCF, scoring the EIA report as 31 BCF to-the-bullish.

This weeks model forcasts are 34 BCF on the EIA-wtd model, and 52 BCF on the Capacity model. Baseline works out to a 69 BCF
injection, scoring the EIA-wtd model projection 35 BCF to-the-bullish, and the Capacity model 17 BCF to-the-bullish.

Next weeks count on milder weather (EIA-wtd model) is 39 BCF so far, though baselines (on softer factory indications) are aiming at
the ~20 BCF to-the-bullish range (for the week) on the early numbers.

......=========================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
......07/14/17......4.3......5.2......5.1......3.6......2.8......3.2......3.7......28.0..........46..........31..........28............62..............-299........135......-229.......-110
......07/21/17......3.9......5.2......4.9......2.8......1.0.....-0.1....-0.6......17.0..........39..........23..........17............49..............-304........107.......-233.......-123
......07/28/17......0.6......2.7......3.6......2.9......3.6......3.3......3.2......20.0..........46..........22..........20............51..............-279..........84......-208.......-128
......08/04/17......5.4......8.0......7.4......4.7......2.9......2.6......3.5......34.5..........52..........34..........................69..............-267..........65......-193.......-134
......08/11/17......8.4......9.8i.....9.6i.....5.9i......6.0i....-0.2i....-0.1i.....39.4i.........48i.........39i...........................................-251..........68.......-179i......-125i

LONGER-TERM MODEL: Fall projection dips to 3627 BCF and spring to 787 BCF but at this point in summer there is way too much salt skew in
the 10-week baseline score estimate. I think we get to 3750 to 3800 this fall with the present HH pricing curve then 950 to 1150 on a normal winter
if the salt-skew is mentally removed. Then you have to look at the odds of a warmer/colder than normal winter after that. No way a call can be made
on that until at least mid-September when we see how fast the northern hemisphere cools following its frozen-inventories peak.

DAILY GLOBAL WARMING MODEL: I am preparing to move the climate modeling from a very old spreadsheet platform to a new platform, with the
transition coming in the September/October time-frame. Presently, the (very) old platform will hit the wall and fail in about 30 days as it runs out of
cells. I have been preparing for the transition for a couple years now, and test runs appear encouraging (though a little work remains to be done)
and it is possible that the model will have to go down for a couple weeks or (more likely) be possibly flagged as experimental during the transition.

I am very excited with the transition, as the old platform limited my research and I am hopeful that the modeling will be able to be advanced late this
fall, especially with the human influence modeling (part 2) which, when it becomes active, I hope will be able to actually measure and track the
strength of the anomalies. This will be a do-or-die moment for the model... if the signatures of the anomalies are all unstable, than the effectiveness
of the model will be doubtful. On the other hand, if the anomalies are stable and progressive, than the model will be able to actually track human
influence and correlate it to industrial and economic activity (from other forms of modeling) to better predict forward climate, including in regards to
the energy markets.

WITH TODAY'S RUNS of the six models, half suggest global cooling this week, half global warming, with warming in the northern hemisphere and
cooling in the south. Slight edge to warming world-wide.

In regards to total northern hemisphere frozen inventory, we move from last week's 20,000 YOY square mile surplus to a 45,000 square mile surplus,
meaning chances stay with a slightly cooler summer for the remainder of 2017. That is, we have 45,000 square miles more of exposed frozen water
(in some form) to dissipate heat (as it melts) than last year, or about 2% more in surface area of frozen water than last year.

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
......08/01/17............1504619....1488634....1490371.......-28174.......-15049......-13124.........-1194...................3801607....3710245....3612885.........-7030........12202.......-19232..........2296
......08/02/17............1485860....1466934....1472366.......-18005.......-14750........-3254.........-1320...................3806165....3719100....3606981.........-5904........11702.......-17606..........1468
......08/03/17............1460411....1442184....1457420.......-14946.......-14466..........-479.........-1432...................3803181....3732459....3610512..........3531........11151.........-7620..........1097
......08/04/17............1449994....1438126....1440679.......-16741.......-14260........-2480.........-1791...................3809619....3745297....3619762..........9250........10697.........-1447............767
......08/05/17............1500815....1421902....1428730.......-11949.......-13867..........1918........-1508...................3713212....3754649....3645213........25451........10552........14898............984
......08/06/17............1490249....1395634....1413389.......-15341.......-13487........-1853.........-1368...................3715072....3765823....3675929........30716........10452........20263..........1596
......08/07/17............1422846....1383600....1395052.......-18337.......-13162........-5174.........-1865...................3828451....3781209....3679082..........3153........10340.........-7187..........1370

......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............426
...............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...............07/21/17............406
...............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...............07/28/17............402
...............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...............08/04/17............405
...............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...............08/11/17............421i
...............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

...............07/08/17.(w)......416
...............07/09/17.(w)......423
...............07/10/17............421
...............07/11/17............443
...............07/12/17............432
...............07/13/17............427
...............07/14/17............419.............426

...............07/15/17.(w)......425
...............07/16/17.(w)......421
...............07/17/17............422
...............07/18/17............383
...............07/19/17............395
...............07/20/17............396
...............07/21/17............399.............406

...............07/22/17.(w)......412
...............07/23/17.(w)......419
...............07/24/17............418
...............07/25/17............390
...............07/26/17............396
...............07/27/17............388
...............07/28/17............390.............402

...............07/29/17.(w)......396
...............07/30/17.(w)......395
...............07/31/17............396
...............08/01/17............408
...............08/02/17............413
...............08/03/17............412
...............08/04/17............419.............405

...............08/05/17.(w)......412i
...............08/06/17.(w)......422i
...............08/07/17............430i............421i
...............(w) = weekend (Saturday/Sunday)