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Natural Gas Market Overview: Dry Gas Production Has Reached A Major Long-Term Peak

November 1, 2019  

This report covers the week ending November 1, 2019.

Total Demand

We estimate that the aggregate demand for American natural gas (consumption + exports) totaled around 665 bcf for the week ending November 1 (up 10.5% w-o-w (week over week) and up 13.0% y-o-y (year over year)). The deviation from the norm remained positive and actually increased from +17.2% to +27.2%. We estimate that total demand has remained above the 5-year norm for 42 consecutive weeks now.

This week, the weather conditions have cooled down significantly across the Lower-48 states. We estimate that the number of nationwide cooling degree-days (CDDs) dropped by 47.0% w-o-w (from 18 to 9), while the number of heating degree-days (HDDs) jumped by 64% (from 61 to 100). Total energy demand (measured in total degree-days - TDDs) was approximately 32.3% above last year's level and around 22.6% above the norm.

However, non-degree-day factors were predominantly bearish (vs. last year). 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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