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Natural Gas Market Overview: Total Supply Is Still Stronger Than Total Demand

September 6, 2019  

This report covers the week ending September 6, 2019.

Total Demand

We estimate that aggregate demand for American natural gas (consumption + exports) totaled around 613 bcf for the week ending September 6 (up 0.9% w-o-w and up 3.5% y-o-y). The deviation from the norm remained positive and edged up from +18.10% to +18.50%. We calculate that total natural gas demand in the U.S. has been expanding in annual terms for 20 consecutive weeks now (see the chart below).

This week, the weather conditions have warmed up across the Lower-48 states. We estimate that the number of nationwide cooling degree days (CDDs) increased by 8.8% w-o-w (from 76 to 83). However, total energy demand (measured in total degree-days - TDDs) was 2.0% below last year's level. Still, total demand for natural gas is growing in annual terms due to bullish non-degree day factors and stronger exports as well as because of structural factors.

The most important four non-degree-day factors that we are looking at are: nuclear outages, the spread between natural gas and coal (coal-to-gas switching), wind speeds, and hydro inflows.

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