Thursday’s EIA report (week ended 1 Dec) – EA Final Estimate: -2 bcf
- We forecast Thursday’s EIA report will show a withdrawal of only 2 bcf (-31 bcf w/w) due to a fall in demand and a new weekly production record of 76.8 bcf/d (+0.9 bcf/d w/w).
- A 3.7 bcf/d w/w drop in total demand to 82.3 bcf/d limited the withdrawal rate. Gas-weighted heating degree days (GWHDDs) fell by 10% w/w, lowering res-com demand by 2.7 bcf/d w/w to 25.8 bcf/d. The Thanksgiving holiday stifled power burn, which fell by 0.6 bcf/d w/w to 20.5 bcf/d, after starting the week below 19 bcf/d for the first time since April. Industrial demand also fell, by 0.3 bcf/d w/w to 21.5 bcf/d, as both heating and baseload demand dipped in the reference week.
- Appalachia production surged by 0.7 bcf/d w/w to 27.4 bcf/d due to a 0.6 bcf/d w/w jump in Marcellus receipts (to 21.9 bcf/d). The new Appalachia record pushed total gas supplies to 82.0 bcf/d (+0.8 bcf/d w/w) despite one of the lowest weekly 2017 readings in net imports from Canada, of 4.8 bcf/d (-0.1 bcf/d w/w). A condensate line failed at the McMahon Gas Plant on 27 November, causing a total plant shutdown. Though McMahon reopened the next day, 0.2 bcf/d in resulting restrictions stayed in place on the Westcoast system through 30 November.
Next Thursday’s report (week ending 8 Dec) – EA Estimate: -55 bcf
- We project a 55 bcf withdrawal this week, as total demand rises by 8.0 bcf/d w/w to 90.3 bcf/d.
- The increase in demand will be driven by a surge in the res-com sector as cold falls over the East and Midwest. GWHDDs are expected to increase by 20% w/w, which will fuel a 5.3 bcf/d w/w jump in res-com demand to 31.1 bcf/d. Power and industrial demand will rise by 2.2 bcf/d and 0.8 bcf/d w/w respectively following the Thanksgiving lull. Meanwhile, volumes of LNG feedgas plunged to 2.5 bcf/d on 5 December, pointing towards a decline of 0.3 bcf/d w/w to 2.9 bcf/d.
- Westbound flows on Rover will drop to zero from 5-6 December in order to complete pipeline tie-ins at Ohio’s Cadiz Compressor Station. The maintenance has affected 0.5 bcf/d in flows, though some gas will likely be diverted to other pipes. GoM production is on track to fall by 0.3 bcf/d w/w to 2.4 bcf/d, the region’s lowest output since Hurricane Nate caused widespread rig shut-ins.
- Despite the production losses, total gas supplies will rise by 0.4 bcf/d w/w, as net imports from Canada are forecast to jump by 0.6 bcf/d w/w. Both the McMahon and Aitken Creek gas plants are fully operational after early week outages, leaving only minor ongoing maintenance at Station 4B on the Westcoast system. The health of the pipeline will boost WCSB outflows, which will rise by 0.2 bcf/d w/w to 15.3 bcf/d after averaging 14.7 bcf/d in November (up by 0.9 bcf/d y/y).
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|