Daily Market Report – Sep 30, 2022

The EIA reported a repeat +103 Bcf injection for the week ending Sept 23th, which came in line with our estimate of +101. This storage report takes the total level to 2977 Bcf, which is 180 Bcf less than last year at this time and 306 Bcf below the five-year average of 3,283 Bcf.

With injection similar week-on-week, below are the details that led to this repeat:

1. Total supply continues to remain strong at over 100 Bcf/d, and basically flat week-on-week. Production out of the GoM was minimally impacted due to Hurricane Ian. Ian avoided the GoM production core area as it swung East after entering the Gulf. That being said, platforms/rigs by some of the major producers were evacuated on a precautionary basis on Tuesday ahead of the storm. The overall impact to natgas volumes was minimal, with the BSEE reported a peak of 0.18 Bcf/d being shut-in on Tuesday. By Thursday all platforms and rigs were once again operational.
2. Overall gas consumption was also flat week-on-week. The lower slightly power burns (-0.9 Bcf/d) were offset by rising RC and Industrial demand. Looking at temps, there were big shifts in temps from one region to the next. The central part of the country got warmer, while the two coasts cooled slightly to even out overall power burns.
3. Overall power loads were higher this past week, but power burns were off with both wind and solar playing a larger role in the power generation mix. Wind generation averaged 47.94 GWh which was 10.5 GWh higher than the previous week. This rising wind output lowered 1.9 Bcf/d or 13 Bcf/week of power burns. Solar generation rose by 1.9 aGWh to 16.9 aGWH, which knocked out 0.4 Bcf/d of gas generation.

Here is a quick table comparing this past week to the same week in 2021.

Hurricane Ian Update

Hurricane Ian forecast to make second landfall in South Carolina Friday bringing wind, heavy rain, and the threat of severe weather to the Carolinas and Mid-Atlantic. One thing to keep an eye on is the Elba LNG facility which sits near Savannah. The strong storm surge could impact the facility that typically takes 0.35 Bcf/d.

The current power outages in Florida have slightly dropped to 1.99M customers still without power. The peak was 2.6M customers yesterday AM. We expect this number to dip over the weekend with crews from across the country ready to get the lights back on. Here is the latest view from PowerOutage.us

Even with so many customers without power, we estimate the total impact to power burns around ~1 Bcf/d.

Today’s Fundamentals

Daily US natural gas production is estimated to be 101.3 Bcf/d this morning. Today’s estimated production is -0.39 Bcf/d to yesterday, and +0.08 Bcf/d to the 7D average.

Natural gas consumption is modelled to be 73.1 Bcf today,  -1.71 Bcf/d to yesterday, and +1.01 Bcf/d to the 7D average. US power burns are expected to be 30.3 Bcf today, and US ResComm usage is expected to be 11.7 Bcf.

Net LNG deliveries are expected to be 12.3 Bcf today.

Mexican exports are expected to be 6.6 Bcf today, and net Canadian imports are expected to be 6.2 Bcf today.

The storage outlook for the upcoming report is +120 Bcf today. (We are looking at a string of low triple-digit burns going forward)

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