Daily Market Report – July 19, 2022

Today’s Fundamentals

Daily US natural gas production is estimated to be  96.5 Bcf/d this morning. Today’s estimated production is -1.44 Bcf/d to yesterday, and -0.19 Bcf/d to the 7D average. Revised nomination data for yesterday took modelled production levels to 98 Bcf/d since the surge of production we saw at the end of last year. Today’s drop comes mainly out of the Northeast where maintenance across a few pipelines looks to be impacting overall production levels.

Natural gas consumption is modelled to be 83.1 Bcf today,  +0.2 Bcf/d to yesterday, and +2.12 Bcf/d to the 7D average. US power burns are expected to be 44.5 Bcf today, and US ResComm usage is expected to be 8.7 Bcf. Both the Northeast and the ERCOT region are hitting much warmer temps this week leading to the higher power burns today. With the lack of C2G, we see natural gas generation doing much more work than we would see in typical years.

Net LNG deliveries are expected to be 11.2 Bcf today. US appears to be pushing as much LNG as possible with the current ambient temps. Yesterday, Gazprom issued a statement to tell is customers that the reduction in flows to Europe is beyond its control. They issued a forced majeure to avoid any legal issues with its current contracts.
https://www.bloomberg.com/news/articles/2022-07-18/gazprom-declares-force-majeure-on-some-european-gas-buyers

This reduction in flows is keeping the arb between the US Gulf Coast and European ports at a the widest levels we have seen so far.

Mexican exports are expected to be 7.2 Bcf today, and net Canadian imports are expected to be 6.5 Bcf today.

For week ending July 15th, the S/D storage model is point to a +45 Bcf injection and flow model is point to a +42 Bcf .

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