Thursday’s EIA report (week ended 6 Jul) – EA Final Estimate: +56 bcf
- We forecast Thursday’s EIA report will show an injection of 56 bcf. A heatwave enveloped the Northeast early in the reference week, with high temperatures above 95°F in Washington, DC, and New York that were 10°F above historic averages. Nationally, the heat pushed population-weighted cooling degree days (CDDs) up by 45% w/w and boosted power burn by 4.7 bcf/d w/w. This demand growth outdid another surge in production, by 0.7 bcf/d w/w, to a record high of 80.6 bcf/d. Appalachia saw the largest gains, of 0.5 bcf/d w/w, to a regional record of 28.1 bcf/d.
Next Thursday’s report (week ending 13 Jul) – EA Estimate: +60 bcf
- We project that the current week will see an injection of 60 bcf. The heatwave in the Northeast dissipated early in the week, and national population-weighted CDDs are on track to drop by 15% w/w. We forecast national power burn will drop by 1.7 bcf/d w/w as a result. Total demand is on track to fall by just 1.0 bcf/d w/w despite the larger drop in power burn, as gas use for industry recovers by 0.7 bcf/d w/w after the 4 July holiday cut industrial demand in the reference week.
- An exception to the more moderate weather in the current week comes from Southern California. SoCalGas issued a curtailment warning to gas customers on 6 July as daily high temperatures in Los Angeles on 6-7 July topped 105°F, more than 25°F above historical norms. SoCal City-gate prices have averaged $6.16/mmbtu this week, up by $1.97/mmbtu w/w amid local demand that hit a three-month high of 2.8 bcf/d on 6 July and will rise by 0.5 bcf/d w/w to an average of 2.5 bcf/d in the current week. While the curtailment watch ended on 9 July, the Pacific region is still projected to post a net withdrawal of 1 bcf this week, after a 5 bcf injection in the reference week.
- Production is on pace to hit another weekly record high, of 80.8 bcf/d. Gains are forecast to come from several less heralded regions, including 0.1 bcf/d w/w each from East Texas and the Uinta.
- Canadian imports are set to fall by 0.4 bcf/d w/w. Along with lower demand for Canadian gas as the US Northeast emerges from the heat, maintenance at NGTL’s Vetchland 2 compressor station between 9-20 July will offline up to 0.4 bcf/d in cross-border flows at the Empress/McNeill point.
- LNG feedgas demand is on track to average 3.3 bcf/d this week, a w/w drop of 0.1 bcf/d. Deliveries to Sabine Pass are on pace to drop by 0.1 bcf/d w/w to 2.8 bcf/d. On 5 July Cheniere Energy postponed maintenance that was scheduled at the Gillis compressor station from 8-10 July to an unscheduled later date, but flows dropped by 0.2 bcf/d d/d on the connected Creole Trail pipeline on 9 July nonetheless. Flows to Cove Point will also drop, by 0.1 bcf/d w/w to 0.5 bcf/d, as cargo-tracking information from Kpler indicates no ships are currently bound for the facility.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|