Daily Market Report – Aug 27, 2021

Yesterday, the EIA reported a +29 Bcf storage injection for week ending Aug 20, which was well below the market expectation of a 37-38 Bcf injection. Salt particularly had a massive draw of -15 Bcf, which was well beyond the 5yr average of -7 Bcf. Salt storage levels now sit at 229 Bcf (-105 vs LY, -28 vs. 5Yr). One of the big contributing facts to the low build was the lack of wind during the week.

In other news, Tropical Storm Ida (was Invest 99L yesterday) is forecast to become up to a Cat 3hurricane impacting US Gulf Coast this weekend. Hurricane watches have been issued from Cameron in Louisiana to the Mississippi/Alabama border. Storm surge watches have been issued from Sabine Pass in Louisiana to the Alabama/Florida border.

This storm has the potential to both impact offshore production and Gulf Coast LNG facilities. More than 1.2 million barrels a day of oil equivalent has being halted so far. Shell, BP and Equinor have already evacuated or is planning to evacuate offshore platforms. Exxon’s Baton Rouge refinery is beginning its hurricane preparedness process, and Chevron Corp. is in clearing non-essential workers from the region.

We see total Gulf area production lower by 1.4 Bcf/d in today’s nomination data, but overall this storm could have a large demand impact with LNG and oil refineries in path. LNG feedgas levels look to remain unchanged so far.

Today’s Fundamentals

Daily US natural gas production is estimated to be  91 Bcf/d this morning. Today’s estimated production is -1.67 Bcf/d to yesterday, and -1.87 Bcf/d to the 7D average.

Natural gas consumption is modelled to be 77.3 Bcf today,  -3.21 Bcf/d to yesterday, and -0.61 Bcf/d to the 7D average. US power burns are expected to be 40.7 Bcf today, and US ResComm usage is expected to be 7.8 Bcf.

Net LNG deliveries are expected to be 10.9 Bcf today.

Mexican exports are expected to be 6.9 Bcf today, and net Canadian imports are expected to be 5 Bcf today.

The storage outlook for the upcoming report is +24 Bcf today.

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