Natgas prices have been extremely volatile the last couple of days as traders try to take in changing weather patterns, increasing Gulf of Mexico production, and all the information related to the start up of Sabine Pass and Cameron. The curve has been shifting dramatically with the front month coming off while winter strip stays very strong. Below you can see the shift in the curve from yesterday’s close. This change is even more exaggerated this morning with Oct prices down to 2.45. VF this morning is trading at 0.94.
For the storage report for week ending Aug 28, our estimates are pointing to a 37 Bcf injection. This would take storage levels to 3457 Bcf. We anticipate this next storage report to be tricky with big changes to both supply and demand as a result of Marco and Laura. Gulf of Mexico supply was off but the increased Canadian imports help to make up the different. On the demand side, the drop in LNG almost offset the increased burns in the Northeast and increased Mexican exports.
Data from the DTI, TCO (Columbia Gas) and SSE (Southern Star) continue to show injection. DTI is 81% full, TCO is 81% full, and SSE is 87% full. All four storage facilities are within or close to the 5Yr range.
Today’s Fundamentals:
Daily US natural gas production is estimated to be 84.7 Bcf/d this morning. Today’s estimated production is -0.9 Bcf/d to yesterday, and -1.3 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 72.4 Bcf today, +0.67 Bcf/d to yesterday, and +0.11 Bcf/d to the 7D average. US power burns are expected to be 37.94 Bcf today, and US ResComm usage is expected to be 7.4 Bcf.
Net LNG deliveries are expected to be 3.1 Bcf today.
Mexican exports are expected to be 6.5 Bcf today, and net Canadian imports are expected to be 3.7 Bcf today.
Bloomberg IM: Het Shah
enelyst DM: @het.co
Tel: 917-975-2960
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ION-Energy-Daily-Report-Sept-2-2020.pdf