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February 21, 2019 Natural Gas Storage Report: Storage Deficit To Continue Expanding.

February 19, 2019  

THE WEATHER

Last week, the number of heating degree-days (HDDs) jumped by 19.5% w-o-w and by almost 17% y-o-y. We estimate that total energy demand (as measured in total degree-days – TDDs) was approximately 14% above last year’s level.

This week, the weather conditions have cooled down again, but only slightly. An increase in heating demand was especially pronounced in Central and Western parts of the U.S. We estimate that the number of HDDs will rise by around 5.0% w-o-w in the week ending February 22. Because HDDs are rising from a relatively high base, the absolute consumption figures remain strong. Indeed, we estimate that total average daily demand for natural gas for the week ending February 22 should be somewhere between 120 and 125 bcf/d, which is as much as 23% above the 5-year average for this time of the year. Total energy demand (measured in TDDs) should be no less than 35% above last year’s level.

Next week (March 1), the weather conditions are expected to warm up a bit. The number of HDDs is currently projected to drop by 4.7% w-o-w. In annual terms, however, heating demand is still expected to remain very strong (as much as 50% above last year’s level), while the deviation from the norm would rise to +18.0% (see the chart below).

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