Friday, September 25, 2020

EIA Natural Gas Weekly Update

As mentioned yesterday, for the next few weeks of the injection season temperature is mor important than production. But first, a look at the sector that tripped us up last week:
From the Energy Information Administration:
In the News:
Industrial sector consumption of natural gas falls amid slowing economy
Natural gas consumption in the U.S. industrial sector declined from 25.4 billion cubic feet per day (Bcf/d) in January 2020 to 20.1 Bcf/d in June 2020, according to the U.S. Energy Information Administration’s (EIA) Natural Gas Monthly. Industrial natural gas consumption in June 2020 was nearly 1.0 Bcf/d lower than its year-ago level. The decline in industrial sector natural gas consumption compared with the previous year began in March 2020, amid responses to the coronavirus disease (COVID-19) that resulted in a global economic slowdown. Industrial sector consumption reached its lowest point in May 2020, falling by 8% compared with 2019 levels. May 2020 consumption of natural gas by U.S. industry marked the largest year-over-year decline since July 2009, during the 2007–2009 recession. Before this year, average U.S. industrial natural gas consumption grew 5.4% in 2018 and was relatively flat (growing 0.1%) in 2019.

Beginning in March 2020, efforts to mitigate COVID-19 began in the United States. Responses to the virus, including stay-at-home orders and temporary closings of nonessential businesses, contributed to a slowing U.S. economy. According to the Bureau of Economic Analysis (BEA), the value of goods and services produced in the United States, known as gross domestic product (GDP), decreased by 9.1% in the second quarter of 2020 compared with the same quarter a year ago. A slowing economy as a result of COVID-19 mitigation efforts also affected GDP in the first quarter of 2020, which grew 0.3%. Last year, the U.S. economy grew 2.2%.

According to the September 2020 Short-Term Energy Outlook, EIA expects annual consumption of natural gas by U.S. industries to decline by 4.4% in 2020 and then grow 1.1% in 2021. EIA forecasts U.S. industrial natural gas consumption to increase in 2021 because of expected growth in the overall economy and the natural gas-weighted industrial production index. The index reflects the growth of the underlying manufacturing subsectors and the relative importance of those subsectors to total natural gas consumption.
A recent Today in Energy article provides more information about recent industrial natural gas demand trends....
....Demand rises, driven by use in buildings. Total U.S. consumption of natural gas rose by 1.0% compared with the previous report week, according to data from IHS Markit. Natural gas consumed in the residential and commercial sectors increased by 2.3 Bcf/d, or 27.9%, week over week amid cooler temperatures on the East Coast. Power generation declined by 6.7%. Industrial sector consumption increased by 2.3% week over week. Natural gas exports to Mexico increased 3.9%. Natural gas deliveries to U.S. liquefied natural gas (LNG) export facilities (LNG pipeline receipts) averaged 6.0 Bcf/d, or 1.0 Bcf/d lower than last week. LNG pipeline receipts fell to nearly 4.0 Bcf/d on Tuesday as Tropical Storm Beta moved through the Gulf of Mexico, disrupting LNG tanker movements. Dominion Energy also announced that its Cove Point LNG facility began annual maintenance on September 21.

U.S. LNG exports decrease week over week. Ten LNG vessels (four from Sabine Pass, three from Corpus Christi, two from Cove Point, and one from Freeport) with a combined LNG-carrying capacity of 37 Bcf departed the United States between September 17 and September 23, 2020, according to shipping data provided by Marine Traffic.....MUCH MORE
And finally, the temperature anomaly map: