Thursday’s EIA report (week ended 5 Jan) – EA Final Estimate: -341 bcf
- We project a record 341 bcf withdrawal, 53 bcf above the previous high recorded in January 2014.
- As low temperatures went below 0°F (-18°C) across the eastern US, total demand soared by 18.3 bcf/d w/w. A nearly 25% w/w increase in gas-weighted heating degree days (GWHDDs) pushed res-com demand up by 12.5 bcf/d w/w to 63.1 bcf/d. Power burn also increased, by 4.1 bcf/d w/w to 28.7 bcf/d, a spike partially attributed to the 3-4 January winter storm. Half of the forced power outages caused by the storm in the Northeast were at coal-fired facilities, while Massachusetts’s Pilgrim nuclear reactor also shut on 3 January due to the storm, adding 0.2 bcf/d to gas demand.
- The cold was a litmus test for LNG feedgas, as operations at Sabine Pass had not yet faced prolonged freezing temperatures and related cash price spikes throughout the US. Feedgas fell by just 0.1 bcf/d w/w to 3.0 bcf/d.
- Freeze-offs pushed production down by 3.2 bcf/d w/w to 74.2 bcf/d. Receipts dropped w/w in several regions: the Rockies (-0.3 bcf/d), Bakken (-0.3 bcf/d), Haynesville (-0.4 bcf/d), and Permian (-0.6 bcf/d). Appalachia was particularly hard hit, dropping by 1.6 bcf/d w/w despite the start of 0.7 bcf/d in flows on the Leach XPress pipeline on 1 January. LNG sendout and Canadian net imports helped ease the losses, rising by 0.7 bcf/d and 1.5 bcf/d w/w respectively.
Next Thursday’s report (week ending 12 Jan) – EA Estimate: -196 bcf
- The withdrawal will moderate as the eastern US emerges from the freeze. Chicago, New York, and Boston saw temperatures rise above freezing on 8 January for the first time since Christmas, which will help cut res-com demand by 15.1 bcf/d w/w. GWHDDs will fall by nearly 25% w/w, and GWHDD projections fell by 10% versus last week’s projections, which called for colder weather.
- Power burn will be the other big demand mover, and is set to drop by 3.9 bcf/d w/w. LNG feedgas demand will fall by 0.8 bcf/d w/w this week to an average of 2.2 bcf/d, as unplanned maintenance to the Gillis Compressor station cut flows to Sabine Pass to 1.3 bcf/d between 6-8 January.
- Production will rebound as freeze-offs ease, pushing output up by 1.7 bcf/d w/w. The Permian will grow by 0.6 bcf/d w/w, returning to its pre-freeze level of 3.6 bcf/d. Haynesville receipts are forecast to add 0.3 bcf/d w/w, while the Rockies and Bakken are each set to gain by 0.1 bcf/d w/w. In total 30-35 bcf in Lower 48 production was lost due to the freeze-offs since late December.
- Canadian net imports will fall by 1.7 bcf/d w/w to 5.8 bcf/d despite the end of the freeze-offs in the WCSB, where receipts rose by 1.0 bcf/d w/w to the pre-cold output level of 15.5 bcf/d.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|