Thursday’s EIA report (week ended 12 Jul) – EA Final Estimate: +62 bcf
- We forecast Thursday’s EIA report will show an injection of 62 bcf. Last week, we noted the late-week landfall of Hurricane Barry was likely to upend early projections for w/w production growth (see North America Storage Update: Lower 48 gas storage, 9 July 2019). Nearly 40% of Gulf platforms were evacuated before the storm, causing a 0.5 bcf/d w/w drop in GoM receipts; total supply dipped by 0.3 bcf/d w/w. Total demand rose by 2.4 bcf/d w/w and further reduced the injection rate. Power burn rose by 0.9 bcf/d w/w on continued heat in the Northeast and West, while industrial demand rebounded by 1.7 bcf/d w/w after the holiday weekend. Barry’s impact on LNG feedgas demand was muted, with intake to Sabine Pass off by just 0.1 bcf/d w/w at 3.5 bcf/d.
Next Thursday’s report (week ending 19 Jul) – EA Estimate: +30 bcf
- The injection rate will shrink to 30 bcf in the current week. We project production will fall by 1.5 bcf/d w/w to 86.3 bcf/d as the aftereffects of Hurricane Barry are felt in the Gulf. While Anadarko, Chevron, and Exxon are returning personnel to restart operations at offshore platforms, the region is not likely to return to its pre-storm output baseline of 3.0 bcf/d until next week. GoM receipts are on track to drop by 1.1 bcf/d w/w to an average of 1.3 bcf/d.
- Canadian production is also suffering from weather disruptions this week. Torrential rain culminating in tornadoes in Alberta’s Duvernay formation on 15 July pushed WCSB output down by 1.5 bcf/d d/d to 12.0 bcf/d. This is the lowest daily production reading from the basin since 2015 and will cause a 0.2 bcf/d w/w decline in US net imports of Canadian gas.
- Total demand is on pace to expand by 2.7 bcf/d w/w on the back of growing power burn. National population-weighted CDDs are forecast to rise by 15% w/w, with high temperatures in the Northeast reaching above 90°F in New York, Philadelphia, and Chicago—10°F above historical norms. We forecast gas power demand will rise by 2.0 bcf/d w/w on the heat.
- LNG feedgas demand is on pace to rebound by 0.1 bcf/d. Flows to Freeport LNG resumed on 13 July for the first time since late May after the facility received permission to commission turbines at its pre-treatment facility last week. Freeport’s intake is on pace to average 0.15 bcf/d this week.
- Maintenance in California will restrict the Pacific region to an injection of just 3 bcf, despite mild high temperatures forecast to hover near 80°F throughout the week in Los Angeles—5°F below the historical average. SoCalGas work from 16–19 July on Line 225 will restrict 0.2 bcf/d of inbound flows, while PG&E upgrades to Redwood Path will choke 0.2 bcf/d in capacity starting 16 July and continuing into next week.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|