Lower 48 gas storage

Published at 19:21 11 Jun 2019 by

Thursday’s EIA report (week ended 7 Jun) – EA Final Estimate: +103 bcf

  • We forecast Thursday’s EIA report will show an injection of 103 bcf. That represents a 16 bcf w/w drop in the injection rate after the week ending 31 May saw the third-largest injection per the current EIA series. In the reference week, total demand grew by 2.3 bcf/d w/w. This was led by a similar-sized gain in power burn as Henry Hub prices fell below $2.40/mmbtu. Production could not help lift the injection rate, with total Lower 48 output falling by 0.6 bcf/d w/w as a force majeure on Leach XPress between 2-8 June cut Appalachia receipts by 0.4 bcf/d w/w.
  • After two consecutive 110+ bcf injections that were each 10 bcf above consensus estimates, we have made further baseline adjustments to our model to boost this week’s injection, which we published as a 98 bcf in last week’s Panorama: The price is light, 6 June 2019.

Next Thursday’s report (week ending 14 Jun) – EA Estimate: +103 bcf

  • We forecast that the current week will see an injection of 103 bcf amid mostly static demand indicators. While national population-weighted CDDs are projected to slide by 5% w/w, Henry Hub prices remain in the $2.30s/mmbtu, enough to prevent power burn from a more precipitous w/w slide. We project gas demand in the power sector will be off by just 0.4 bcf/d w/w to 30.7 bcf/d.
  • The Pacific is the one region in the US facing hotter-than-average weather in the current week. Southern California endured heat advisory warnings on 10-11 June as high temperatures reached above 90°F, 10°F above the historical average. SoCalGas demand is on track to grow by 0.2 bcf/d w/w to 2.1 bcf/d as a result, which will help cut the Pacific’s net injection by 4 bcf w/w to 9 bcf.
  • We project total Lower 48 production will edge up by 0.1 bcf/d w/w to 86.4 bcf/d. Appalachia output is on track to increase by 0.2 bcf/d w/w after the Leach XPress force majeure was lifted.
  • We expect Gulf of Mexico receipts to decline by 0.2 bcf/d w/w due to maintenance on two pipelines. Up to 0.1 bcf/d in flows on the Destin Pipeline will be lost between 11-26 June because of a planned shutdown of the Pascagoula processing plant, while a force majeure for an exposed portion of pipe has cut flows on the 0.1 bcf/d Stingray Pipeline to zero since 4 June.
  • We forecast LNG feedgas demand will be flat w/w at 5.2 bcf/d. The largest change among the individual facilities will be at Corpus Christi, which is on pace to see its gas intake grow by 0.2 bcf/d w/w. The terminal took 1.0 bcf/d on 11 June, up by 0.2 bcf/d d/d as flows to Train 2 ramped up. Small w/w declines from Cameron LNG—where commissioning issues have reduced flows to zero on every day but one since 4 June—and Sabine Pass will cancel out Corpus Christi’s gains.
Fig 1: Regional flows and fundamentals model, bcf
Source: Energy Aspects
Fig 2: Balance forecasts, bcf/d
Source: Energy Aspects

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