Daily Market Report – Oct 27, 2022

For week ending Oct 21^st, the S/D storage and flow model are pointing to a +58 Bcf injection. This reporting period will take L48 storage level to 3,340 Bcf (-136 vs LY, -191 vs. 5Yr). Last year we injected only +88 Bcf during the same week. This will be the 2nd weekly injection in 10 weeks that will fall short of last year.

This is the results of our flow estimate.

The current Bloomberg survey is +60 and Bloomberg whisper is currently at +60 (the whisper is the average of the 17 top analysts).

Here are the current ICE storage future settles as of yesterday.

Week 1 is +45 [no OI]

Week 2 is +20 [no OI]

Week 3 is +-5 [no OI]

There current end of Summer 2022 (Nov 10^th) is 3585, OI = 83. [Last week was 3560, OI = 83]
There current end of Winter 2022/23 (Apr 13^th) is 1680, OI = 56 [Last week was 1680, OI = 56]

Today’s Fundamentals

Daily US natural gas production is estimated to be 101.3 Bcf/d this morning. Today’s estimated production is +0.43 Bcf/d to yesterday, and +0.15 Bcf/d to the 7D average. Production has been lower out of West Texas with scheduled maintenance on Kinder Morgan’s (KMI) Gulf Coast Express and El Paso gas pipelines, which carry gas away from the Permian Basin. Most gas produced in the Permian is associated gas, that is most likely being flared with lack of takeaway. These pipeline maintenance projects are expected to last until the end of the week, after which we should see all that gas return to market quick. [Below is a view showing that almost all operating rigs in the Permian are oil-directed]

Natural gas consumption is modelled to be 81.7 Bcf today,  +1.66 Bcf/d to yesterday, and +8.95 Bcf/d to the 7D average. US power burns are expected to be 30.1 Bcf today, and US ResComm usage is expected to be 21.2 Bcf. Today’s weather runs were also bearing pointing to an even warmer start for Nov. Here are the 24hr total degree day (TDD) changes by region.

Net LNG deliveries are expected to be 11.5 Bcf today.

Mexican exports are expected to be 6.2 Bcf today, and net Canadian imports are expected to be 5.1 Bcf today.

Below is a view of the location of current operating rigs broken up by oil and gas directed drilling.

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