The EIA reported a +52 Bcf injection for the week ending Oct 21st, which came in lower than market expectations of +60 and our estimate of +58. This storage report takes the total level to 3394 Bcf, which is 142 Bcf less than last year at this time and 197 Bcf below the five-year average of 3,591 Bcf. After 5 consecutive triple-digit build, this one really disappointed the bears.
Noteworthy this week was the ultra-weak Salt storage injection compared to the past few weeks, and relative to the same week last year.
Our fundamental storage model overestimated injection for the reporting period by almost 1 Bcf/d. Here are the details we gather from the fundamentals, and it’s likely we missed the strength of RC demand as temps fiercely cooled everywhere except the Mountain and Pacific regions:
- Total domestic production fell by -1.4 Bcf/d across multiple regions. The most notable losses were in the Permian which saw production drop by as much at 1 Bcf/d. The drop in production in the region led to Waha cash strength.
- Gas consumption rose once again with the cooler temps starting to set in across much of the country. The heavily populated Midwest and Northeast finished the period much below normal leading to a pick up in RC gas consumption. During the reporting week, HDDs at the national level rose by 3.9F. Here is a view of the temps by EIA region.
- With CDDs quickly diminishing, power loads remained flat once again. As usual, the power mix did change. Natural gas generation dropped by 8.5 aGWh, as Wind and Coal generation picked up.
- LNG feedgas also moved higher with Sabine Pass starting to operate at higher levels as temps cool along the Gulf Coast.
We calculate this reported injection to 2.8 Bcf/d loose YoY – (wx adjusted). [We compare this report to LY’s rolling 5-week regression centered around week #42]
Although this report is still loose relative to last year, it is much tight with respect to much of September and October.
Our estimate for week ending Oct 28th is +94 Bcf. This reporting period will take L48 storage level to 3,488 Bcf (-114 vs LY, -148 vs. 5Yr).
Today’s Fundamentals
Daily US natural gas production is estimated to be 101.6 Bcf/d this morning. Today’s estimated production is -0.02 Bcf/d to yesterday, and +0.27 Bcf/d to the 7D average. Production looks to be rebounding out of West Texas with potential completion of the Kinder Morgan pipeline maintenance on GCX and El Paso.
Natural gas consumption is modelled to be 81.9 Bcf today, -1.09 Bcf/d to yesterday, and +7.06 Bcf/d to the 7D average. US power burns are expected to be 29.5 Bcf today, and US ResComm usage is expected to be 21.4 Bcf.
Net LNG deliveries are expected to be 12.3 Bcf today. Cove Point maintenance looks to be done for today’s gas day. The facility nominated to receive 0.75 Bcf/d.
Mexican exports are expected to be 6.2 Bcf today, and net Canadian imports are expected to be 4.8 Bcf today.
The storage outlook for the upcoming report is +94 Bcf today.
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NatGas-Daily-Report-Oct-28-2022.pdf