Friday, January 22, 2016

Natural Gas: EIA Weekly Supply/Demand Report

Right now supply is swamping demand despite natural gas almost topping coal as the power burn fuel of choice.
Front futures $2.139 up 0.001.

From the Energy Information Administration:

U.S. natural gas net imports
In the News:
Consumption of natural gas for power generation at record highs
Since January 1, consumption of natural gas for electric power generation (power burn) has averaged 26.0 billion cubic feet per day (Bcf/d), 24% greater than the five-year average and 3% higher than the five-year maximum. While power consumption is typically highest in summer to meet air-conditioning demand, about 39% of all households in the United States rely on electricity as their primary heating source. In the Southeast, where most of the homes use electricity for space heating, natural gas is a relatively large share of the generation mix. However, the growth in power burn this month has occurred despite electricity-weighted heating degree days that were close-to-average nationally and in the Southeast region.

Low natural gas prices and growth in natural gas power generation infrastructure are the main drivers in the consumption growth. This is a continuation of a trend, with 2015 being a record-high year for power burn, according to preliminary Bentek data. Bentek estimated that power burn averaged 26.4 Bcf/d in 2015, 6.8% greater than the next-highest annual average, in 2012.

Nationwide, natural gas-fired generation has been rising, as coal has declined as a share of total generation. In 2015, coal plant retirements accelerated as the Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS) rules were implemented. Through October 2015, around 11 GW of coal-fired generation was retired, although this generation was likely already running at a reduced capacity factor, meaning that those plants were active for fewer hours a day than before....MUCH MORE
...Production rises. Dry natural gas production rose 0.3% week-on-week, according to Bentek Energy. Imports of natural gas from Canada to the United States rose 10.7% from last week, contributing an additional 0.6 Bcf/d of supply. LNG sendout rose 75.6% this week, as Cove Point LNG facility in Maryland re-gasified some of its stocks to meet elevated consumption. Overall supply was up 1.6% week-on-week.

Consumption rises. Total U.S. consumption rose 3.1% week-on-week, according to Bentek data. Residential and commercial consumption drove the increase, rising 7.9%, or 3.8 Bcf/d over the report week. As typically happens in cold weather, industrial consumption also rose, increasing by 1.3%. Power burn, though still elevated compared to last year at this time, fell slightly this week, decreasing by 3.0%. The decrease in power burn was driven by the Southwest, which experienced more mild temperatures this report week compared to last. Exports to Mexico fell somewhat, declining by 4.5% for the period....
"Natural-gas prices turn lower as U.S. supplies decline less than expected"

"Natural Gas Rises on Expectations for Big Draw from Stockpiles"--UPDATE
Well (so to speak) it's been six days since "Natural Gas: EIA Weekly Supply/Demand Report (and a long trade for the nimble)" at $2.108 and now, fifteen minutes ahead of the EIA's storage report we're sitting at $2.172 +0.054.; $640 to the good on each $2250 margin, or 28% cash on cash profit.
No pressure.
We've counted the heating degree days and taken the pulse of market participants and....who knows.

Here's the Wall Street Journal fifty minutes ago...