Daily Market Report – Oct 16, 2020

Yesterday prices moved higher and stayed higher with cooler weather in the short-term and a lower than expected storage injection. The EIA reported a +46 Bcf being injected for week ending Oct 9^th, while most analysts were expecting +51 Bcf. This indicates a tight market, but in our view this tight number cancels the looser than expected number from the week prior.

In this morning’s data, we see LNG feedgas levels rising above 8 Bcf/d with Sabine increasing its intake. Cameron continues to take only 0.5-0.6 Bcf/d. The discovery of a sunken barge, and oil rig and a recreational boat in the Calcasieu Ship Channel continues to halt LNG liquefaction levels at the terminal. Yesterday, the U.S. Army Corps of Engineers, U.S. Coast Guard (USCG) and others were working to remove the oil rig and recreational boat, but no there is no definitive timeline on the removal of the barge. The channel is currently not permitting vessels with drafts of 25 feet or higher. LNG vessels typically have up to a 37-foot draft when loaded.

Today’s Fundamental’s

Daily US natural gas production is estimated to be  87.9 Bcf/d this morning. Today’s estimated production is -0.48 Bcf/d to yesterday, and +2.13 Bcf/d to the 7D average.

Natural gas consumption is modelled to be 75.7 Bcf today,  +3.94 Bcf/d to yesterday, and +5.42 Bcf/d to the 7D average. US power burns are expected to be 30.84 Bcf today, and US ResComm usage is expected to be 17.9 Bcf.

Net LNG deliveries are expected to be 8.2 Bcf today.

Mexican exports are expected to be 6.4 Bcf today, and net Canadian imports are expected to be 3.2 Bcf today.

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