Thursday’s EIA report (week ended 5 Jul) – EA Final Estimate: +82 bcf
- We forecast that Thursday’s EIA report will show a net injection of 82 bcf. The heat that was missing early in the summer—allowing for six straight triple-digit injections in May and June—settled over much of the country in the reference week. National population-weighted CDDs grew by 35% w/w, pushing power burn up by 3.4 bcf/d w/w. The resulting growth in total demand was able to overcome strong supply gains. Lower 48 production rose by 0.5 bcf/d w/w as Appalachia output averaged 31.0 bcf/d (+0.3 bcf/d w/w) for the first time since January. Net Canadian imports also rose, by 0.8 bcf/d w/w, as the Northeast US turned to imports amid high temperatures.
Next Thursday’s report (week ending 12 Jul) – EA Estimate: +68 bcf
- We project that 68 bcf will be sent into storage in the current week as total demand rises by 2.0 bcf/d w/w. The bulk of the uplift will come from the industrial sector, which will grow by 1.8 bcf/d w/w as the holiday impact fades. Power burn is on track to shrink by 0.4 bcf/d w/w on flat population-weighted CDDs, as hot weather is forecast to linger in the Northeast and West.
- LNG feedgas will add 0.3 bcf/d w/w to total demand to average a record 6.2 bcf/d for the week. Cameron hit new highs for the facility above 0.5 bcf/d on 6-7 July, having loaded its third cargo on 4 July. The facility’s intake is on track to grow by 0.1 bcf/d w/w as it moves towards commercial start-up. Corpus Christi T2 feedgas will also grow by 0.1 bcf/d w/w as it continues commissioning.
- We project US production will grow by 0.5 bcf/d w/w to 88.3 bcf/d. The gains are concentrated in the South Central, particularly Haynesville (+0.3 bcf/d w/w) and the Permian (+0.1 bcf/d w/w). The potential for a tropical depression to form in the Gulf of Mexico late in the week adds some risk to our production growth projection.
- Strong production will allow the South Central injection rate to shoot up by 5 bcf w/w to 24 bcf. Weather is also a factor, as the region is one of the few areas of the country seeing seasonally average temperatures (highs are forecast to be mostly in line with historical averages in the mid 90s in Houston and New Orleans through the end of the week). This will allow the salt storage rate to grow by 4 bcf w/w to a 5 bcf injection.
- Our projection for a 0.3 bcf/d w/w decline in net imports from Canada will offset some of the US production growth. Capacity on the Westcoast Pipeline fell from 1.3 bcf/d to 0.8 bcf/d on 5 July as hydro tests began at Station 4B. Flows through the downstream Sumas border point fell by 0.3 bcf/d d/d on 5 July and will likely stay depressed through the end of maintenance in early August.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|