Thursday’s EIA report (week ended 1 Feb) – EA Final Estimate: -255 bcf
- We forecast Thursday’s EIA report will reflect the impact of the recent arctic blast, with the largest withdrawal of the heating season thus far at 255 bcf. National gas-weighted HDDs (GWHDDs) increased by 15% w/w as the Midwest endured several days of sub-zero temperatures. Res-com demand spiked by 8.6 bcf/d w/w as a result. Power burn also rose, by 2.6 bcf/d w/w to 30.4 bcf/d, the highest level thus far this winter. Combined demand in PJM and MISO peaked at 240 GW, 3 GW below levels hit in January 2018 despite near-record low temperatures. Reduced coal generation compared to the peak 2018 week offset lower overall power use.
- Total supply edged up by 1.2 bcf/d w/w, led by a 0.7 bcf/d w/w jump in net imports from Canada amid the cold. Lower 48 production also grew, by 0.6 bcf/d w/w, as gains of 0.3 bcf/d w/w in the Haynesville and East Texas outweighed 0.2 bcf/d in w/w losses due to freeze-offs in Appalachia.
Next Thursday’s report (week ending 8 Feb) – EA Estimate: -92 bcf
- We forecast that the current week will see a withdrawal of 92 bcf as weather moderates in the Midwest and Northeast. National GWHDDs are forecast to drop by 30% w/w, leading to a massive 18 bcf/d w/w decline in res-com demand. Power burn will also retreat, by 4.5 bcf/d w/w.
- Total Lower 48 production is set to trim by 0.2 bcf/d w/w. While Appalachia will recover from freeze-offs by 0.3 bcf/d w/w, Gulf of Mexico receipts will decrease by 0.4 bcf/d w/w. Unplanned maintenance on the Destin Pipeline (off the coast of Mississippi) that began on 1 February is limiting regional flows by the same amount, with no end-date yet scheduled.
- The largest impact on total supply will come from Canadian net imports, which are on track to fall by 1.8 bcf/d w/w to 5.1 bcf/d. US exports through the St. Clair border point in Michigan will rise by 0.7 bcf/d w/w, shrinking net imports after the cold snap limited flows to Canada out of the US Midwest in the reference week. Canadian exports in the west will also fall, by 0.7 bcf/d w/w, due to declining WCSB output. Temperatures in Alberta production areas dropped as low as -20°F from 3–5 February and caused freeze-offs that will depress WCSB receipts by 0.8 bcf/d w/w.
- We forecast LNG feedgas demand will plummet by 1.1 bcf/d w/w to 3.0 bcf/d. Flows to Sabine Pass will lead the declines—after starting the week at 3.3 bcf/d, the terminal’s intake dropped to just 0.8 bcf/d on 5 February, its lowest reading in over a year. The decline has registered across several pipes feeding the facility, pointing to a combination of on-site maintenance (which Cheniere has not announced as per usual) and weather as the culprit. Fog in the Gulf of Mexico this week has delayed loadings and left three tankers waiting just offshore from Sabine.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|