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Natural Gas Market Overview: A Mix Of Warm Weather, Slowing Production And Record-High LNG Exports

January 24, 2020  

This report covers the week ending January 24, 2020.

Total Demand

We estimate that the aggregate demand for American natural gas (consumption + exports) totaled around 920 bcf for the week ending January 24 (up 14.2% w-o-w (week over week) and up 2.4% y-o-y (year over year)). The deviation from the norm remained positive actually jumped sharply from +0.1% to +23.2%. We estimate that total demand has been above the five-year norm for 54 consecutive weeks now.

This week, the weather conditions have cooled down significantly across the Lower-48 states. We estimate that the number of nationwide heating degree-days (HDDs) increased by 25.5% w-o-w (from 158 to 198). However, total energy demand (measured in total degree-days - TDDs) should be some 1.3% below the norm and as much as 12.0% below last year's level.

Consumption-wise, Friday's 00z and 06z short-range weather models were mostly bearish (vs. previous results). TDDs are generally projected to trend higher, but remain below the norm (until at least Feb. 3 - Feb. 5). Furthermore, there is a disagreement between the models in terms of scale. According to ECMWF-ENS (00z) model, natural gas consumption should average around 107 bcf/d over the next 15 days, but GFS-ENS (06z) model is forecasting 109.2 bcf/d over the same period.

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