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Natural Gas Storage Forecast: The Weather Is Bullish, But Annual Storage 'Surplus' Will Still Grow This November

October 30, 2019  

The Weather

Last week

Last week (ending October 25), the number of heating degree days (HDDs) dropped by approximately 7.5% w-o-w (from 66 to 61), as weather conditions warmed up slightly across the country. Cooling demand has increased by about 16.9% but remains too weak to have a meaningful impact on natural gas consumption. We estimate that total energy demand (as measured in total degree days, or TDDs) was approximately 20.0% below last year's level, but only 2.0% below the norm (see the chart below).

This week

This week (ending November 1), the weather conditions are cooling down quite substantially. We estimate that the number of nationwide HDDs will surge by as much as 64% w-o-w (from 61 to 100), while the number of nationwide CDDs will drop by 47% (from 18 to 9). Total average daily demand for natural gas should be somewhere between 90 bcf/d and 95 bcf/d, which is approximately 26.0% above the 5-year average for this time of the year. Total energy demand (measured in TDDs) should be around 23.0% above the norm and as much as 32% above last year's level.

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