Natural Gas Imports From Canada Fall Sharply On Mild Northeast While LNG Exports Dip, But Still Set New Weekly High; Supply/Demand Imbalances Tighten To End The Week
Friday, December 11, 2020
Natural gas production will hold nearly steady today, dropping just -0.2 BCF to 89.8 BCF/day, down -4.8 BCF/day from last year. However, the big move on the supply side will come from imports from Canada which will tumble -0.8 BCF/day to just 4.4 BCF/day today. This is the lowest since November 27 and is only +0.5 BCF/day higher than a year ago, the narrowest differential since November 20. The drop in net imports comes as temperatures warm across the Northeast and will be driven by a -0.4 BCF/day decline in volumes coming across at Waddington, NY as well as a +0.2 BCF/day uptick in exports crossing into Canada at St. Claire, MI. Total Supply today stands at 94.2 BCF/day, down -4.2 BCF/day from last year.
On the demand side, LNG exports will dip by -0.2 BCF/day to 11.1 BCF/day, still up +3.4 BCF/day from last year. The drop will be driven by a -0.1 BCF decline in volumes to Sabine Pass and a -0.1 BCF/day decline at Corpus Christi. Nonetheless, LNG feedgas demand has now held above 11 BCF/day for 8 straight days and, for the storage week of December 5-11 that ends today, total volumes reached 79.0 BCF/day, a new record high and up +24.8 BCF from last year. Exports to Mexico, meanwhile, will hold steady at 5.8 BCF/day today, up +0.5 BCF/day from last year.
The year-over-year natural gas supply/demand imbalance will tighten by 1.2 BCF/day from yesterday based on these early-cycle pipeline numbers to -8.5 BCF/day tight versus 2019. The imbalance versus the 5-year average will similarly tighten by 0.9 BCF/day to 4.3 BCF/day tight, a new 30-day high. Of note, imbalance numbers for the past week loosened somewhat yesterday after the EIA’s weekly powerburn number surprisingly came in 1 BCF/day weaker than my projections, resulting in a downward revision.