Thursday’s EIA report (week ended 27 Sep) – EA Final Estimate: +110 bcf
- We forecast Thursday’s EIA report will show a second consecutive triple-digit injection, of 110 bcf. Power burn dropped by 2.3 bcf/d w/w, as cooler weather arrived, though the decrease would have been larger if not for declines in other generation. Nuclear, hydro and wind all fell w/w, slightly limiting the decrease in the net call on thermal generation. Production also jumped by 0.5 bcf/d w/w to pad the build, with Rockies uplift of 0.3 bcf/d w/w adding the most to the growth.
- We have adjusted our model after last week’s 102 bcf injection was well above consensus estimates close to 90 bcf. We have boosted our baseline production figure, assuming the miss was on the supply side—as opposed to significantly limited demand from flooding associated with Tropical Storm Imelda. This will add risk to our estimate in the week ahead as well.
Next Thursday’s report (week ending 4 Oct) – EA Estimate: +103 bcf
- We forecast that the current week will see an injection of 103 bcf. Power burn is on track to edge up by 0.8 bcf/d w/w to limit the total stockbuild, as population-weighted CDDs are forecast to increase by 15% w/w. Lower cash gas prices—Henry Hub is back in the $2.30s/mmbtu after averaging $2.53/mmbtu last week— are also boosting power demand.
- Pacific injections will be limited by annual testing at Washington state’s Jackson Prairie storage facility starting on 1 October. Activity at the site will be fully restricted until 21 October. In the current week, this will cap Pacific injections at 7 bcf (+1 bcf w/w), despite cool temperatures throughout the West.
- We forecast Lower 48 production will grow by 0.9 bcf/d w/w even after our upwards baseline adjustment. Appalachia receipts are on track to increase by 0.3 bcf/d w/w, while Permian output will also rise by 0.3 bcf/d w/w on new volumes through the recently fully in-service Gulf Coast Express. Gulf of Mexico production is on track to rebound by 0.3 bcf/d w/w, after the Nautilus pipeline returned on 26 September from a seven-day full shut-in.
- Net exports to Mexico are on pace to jump by 0.4 bcf/d w/w. Maintenance on the Ramones-Escobedo SISTRANSGAS portion of NET Mexico, which suppressed flows by 0.3 bcf/d, ended on 25 September, while nominations on Sur de Texas-Tuxpan are up by 0.2 bcf/d w/w to 0.75 bcf/d.
- We project LNG feedgas demand will rise by 0.3 bcf/d w/w to 6.2 bcf/d. Flows to Freeport LNG are set to rise by 0.3 bcf/d w/w to 0.6 bcf/d after the terminal loaded its third cargo on 30 September. Elsewhere, Cove Point remains offline for another week of scheduled maintenance.
|Fig 1: Regional flows and fundamentals model, bcf|
|Source: Energy Aspects|
|Fig 2: Balance forecasts, bcf/d|
|Source: Energy Aspects|