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Natural Gas Storage: The Weather Models Have Continued To Disappoint The Bulls

February 5, 2020  

The Weather

Last week

Last week (ending January 31), the number of heating degree days (HDDs) dropped by another 17.2% w-o-w (from 198 to 164). Indeed, we estimate that total energy demand (as measured in total degree days, or TDDs) was as much as 32.0% below last year's level and 17.0% below the 30-year norm. Cooling demand remained too weak to have a meaningful impact on natural gas consumption.

This week

This week (ending February 7), the weather conditions will get even warmer. We estimate that the number of nationwide HDDs will drop by another 7.7% w-o-w (from 164 to 151). Total average daily demand for natural gas should be somewhere between 115 bcf/d and 120 bcf/d, which is approximately 9.4% above the 5-year average for this time of the year. However, total energy demand (measured in TDDs) should be some 6.2% below last year's level and as much as 20% below the 30-year norm.

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