Yesterday, the EIA reported at 37 Bcf injection which was inline with expectation. Although the EIA report was neutral, nat gas prices jumped post-report. The August Nymex contract climbed 10.4 cents day/day and settled at $1.796/MMBtu. September rose 11.7 cents to $1.843.
For today’s gas day, LNG deliveries look have dropped below 3 Bcf/d to 2.9 Bcf/d. July 9th was the only other day where deliveries fell to these levels. Sabine was the biggest mover, which had nominations drop to 0.82 Bcf/d or 19% of peak observed peak levels. The expectations are for LNG export levels to remain low in August, but then a general rise into September and October. With current global LNG spreads, we could potentially be back at full US LNG utilization by November.
In global LNG news, Chevron discovered numerous cracks in 8-11 heat exchangers on Train 2 at their Australian Gorgon LNG plant. The Australian Manufacturers Union has called for an immediate shutdown, which could be good for some of the unutilized US capacity. Chevron is reportedly inspecting those exchangers, delaying a planned restart to the train, which recently completed scheduled maintenance work. The initial plan was for work to be wrapped up on July 11.
Today’s Fundamentals:
Daily US natural gas production is estimated to be 85.8 Bcf/d this morning. Today’s estimated production is -0.4 Bcf/d to yesterday, and -0.4 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 74.2 Bcf today, -2.2 Bcf compared to the yesterday and -3.6 Bcf to the 7D average. US power burns are expected to be 42.4 Bcf today, and US ResComm usage is expected to be 7.5 Bcf.
Net LNG deliveries are expected to be 2.9 Bcf/d today.
Mexican exports are 6.6 Bcf/d. Net Canadian are 4.0 Bcf/d.
Bloomberg IM: Het Shah
enelyst DM: @het.co
Tel: 917-975-2960
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ION-Energy-Daily-Report-July-24-2020.pdf