Daily Market Report – Oct 31, 2022

The Dec contract is looking to open much stronger this morning with a few tightening factors. First, we had the return of Cove Point which has taken LNG deliveries to over 12.5 Bcf/d. We expect the total feedgas level to continue to rise as temps cool. Second, the major weather models added a few more HDDs to the mid-Nov forecast. The overall price move this morning is quite extreme though with how Nov temps are looking to shape up.

Here are the changes from Friday.

This latest pattern projections takes the forecast well below normal TDD levels. This looks to be the consensus view going forward, which is the reason the market has pushed below $5.

Today’s Fundamentals

Daily US natural gas production is estimated to be  101.9 Bcf/d this morning. Today’s estimated production is +0.44 Bcf/d to yesterday, and +0.49 Bcf/d to the 7D average.

Natural gas consumption is modelled to be 75.4 Bcf today,  -3.07 Bcf/d to yesterday, and -4.34 Bcf/d to the 7D average. US power burns are expected to be 29.3 Bcf today, and US ResComm usage is expected to be 16 Bcf.

Net LNG deliveries are expected to be 12.5 Bcf today. US LNG arbs are still wide open despite the big drop in prices at TTF and JKL. We should continue to see rising US LNG feedgas levels as we move into the winter.

Mexican exports are expected to be 6.2 Bcf today, and net Canadian imports are expected to be 5.6 Bcf today.

The storage outlook for the upcoming report is +98 Bcf today.

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