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Natural Gas Storage: The Market Underestimates The Demand Side Of The Equation

January 22, 2020  

The Weather

Last week

Last week (ending January 17), the number of heating degree days (HDDs) edged down by 0.8% w-o-w (from 159 to 158). Cooling demand remained 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 15.3% below last year's level and as much as 19.5% below the 30-year norm.

This week

This week (ending January 24), the weather conditions got significantly colder. We estimate that the number of nationwide HDDs will jump by about 27.0% w-o-w (from 158 to 200). Total average daily demand for natural gas should be somewhere between 127 bcf/d and 132 bcf/d, which is approximately 22.1% above the 5-year average for this time of the year. Total energy demand (measured in TDDs) should be some 11.0% below last year's level but mostly within the 30-year norm.

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