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June 1 Natural Gas Weekly: If Market Variables Do Not Change, Storage Level Will Drop Below 5-Year Minimum In Two Months

June 1, 2018  

We estimate that aggregate demand for American natural gas (consumption + exports) totaled around 470 bcf this week (up 3.5% w-o-w and up as much as 12.0% y-o-y). The deviation from the norm stayed positive and actually increased from +18.0% to +23.0% (see the chart below). According to our calculations, aggregate demand for U.S. natural gas (on a weekly basis) has been above 9-year norm since February 24, 2017. The weather conditions were abnormally hot. We estimate that the number of cooling degree-days (CDDs) jumped by no less than 42% w-o-w and was some 60% above last year's level.

Total exports were up just 1.0% w-o-w - primarily due to stronger pipeline inflows into Mexico. However, LNG demand remained subdued. According to Marine Traffic data, only three LNG tankers (total natural gas carrying capacity of 10 bcf) departed from Sabine Pass over the past seven days. Also, two vessels (7 bcf capacity) have departed from Cove Point. In annual terms, total exports were up 4.0%.

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