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August 24 Natural Gas Weekly: Supply Keeps Marching Higher, While Demand Is Heading Towards A Seasonal Low.

August 26, 2018  

This report covers the week ending August 24, 2018.

TOTAL SUPPLY/DEMAND BALANCE

We estimate that aggregate demand for American natural gas (consumption + exports) totaled around 502 bcf last week (up 3.0% y-o-y, but down 5.5% w-o-w). The deviation from the norm stayed positive, but declined slightly: from +23% to +17.0% (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 cooled down across the U.S., but the drop in cooling demand was especially pronounced in the Midwest, Northeast and Southeast parts of the country. We estimate that the number of cooling degree-days (CDDs) dropped by no less than 13.0% w-o-w, for the week ending August 24. Total energy demand (measured in total degree-days) was also below last year’s level, but only by around 1%. Seasonal trends call for a declining number of CDDs and TDDs. Natural gas consumption should hit a trough in mid-September or early October.

Total exports dropped by 9% w-o-w, mostly due to weaker LNG demand. According to Marine Traffic data, Sabine Pass and Cove Point together served only 5 LNG tankers this week (total natural gas carrying capacity 17 bcf). In annual terms, total exports were up 27.0%.

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