Previewing the Energy Information Administration’s 12/20/12 report.
Each week, we poll 40 professional storage forecasts for our weekly Natural-Gas Storage Box Scores (as seen in each bi-weekly issue of Energy Metro Desk*). This is North America's biggest and most comprehensive natural-gas storage survey and report.
Some housekeeping notes first: Next week the EIA will release its storage report at 10:30 a.m. on Friday, December 28th. And, the first report of the year will fall on Friday, January 4, 2013 at 10:30 a.m. Secondly, Christmas is next week, so, Merry Christmas everybody.
This week the spread between categories we track was well over the 3 Bcf threshold, thus signaling a possible surprise out of EIA on Thursday. The spread between categories was actually 3.9 Bcf. We see the bias heading south this week-- that is, a smaller injection than the market would have you believe. So, 65-70 Bcf could be right on the money. --the editor.
Due to the rapid rise in the development of shale gas, natural gas surpassed coal as the most-produced domestic fuel in 2011, the Energy Information Administration (EIA) said Thursday. Gas production was 23.5 quadrillion Btu (quads) in 2011 compared to coal's 22.2 quads, according to the EIA. Gas accounted for nearly 39% of the 60.6 quads of domestic fossil fuel produced last year, which exceeded the previous record of 59.3 quads in 1998.
Production of crude oil, which experienced a long decline from 20.4 quads in 1970 to 10.5 quads in 2008, rose to almost 12 quads in 2011, the EIA said. And natural gas plant liquids, which are distinct from "dry" natural gas, climbed to their highest level, 2.9 quads in 2011, the agency said. Overall in 2011, the United States produced about 78 quads of energy, more than at any point in the nation's history, according to the EIA. More than three-quarters of the energy production came from nonrenewable fossil fuels: coal, natural gas, crude oil and natural gas plant liquids. But despite rising production, the agency said the United States remained a net energy importer, consuming more than 97 quads of energy in 2011.
Storms next week and the week after are complicating the forecast picture and keeping detail confidence on the low side. We still have the big picture view that changes in the pattern over Alaska in the 6-15 day range are opening the door for more cold air access into the U.S. But as is usual with the inception of a new colder pattern, the initial cooling tends to under-perform expectations and be less impressive. So we have to maintain caution on the forecasts. The block in eastern Canada is so far west at times, it does limit the cold access a bit (ideally, a Hudson Bay low is needed to help usher cold air south). The European ensembles begin trending toward a more classic Hudson Bay low feature by late in the 11-15 day and as a result, a possible stronger cold push is emerging at that point (early days of Jan).
Energy Metro Desk editors forecast this week: -64 Bcf
Current Storage Level: 3,806
Surplus over 2011: +48 (1%)
Surplus over 5 Yr Avg: +283 (8%)
Notes of Note:
**Total outages were down 8GW week on week.
**Nuclear outages were down 3GW to 12GW. **US average nuclear output increased for the sixth consecutive week, jumping ~1.2 GW w-o-w (it remains below 10-year average levels, however)
**Coal outages decreased 5GW to 23GW
**Overall outages are flat relative to prior year levels due mainly to decreased coal outages offsetting increased nuclear outages YOY.
**Pipe flows for last week show average US gas demand increased 10.9 Bcf/d (10.9%) w-o-w to 76.3 Bcf/d.
**Cooler weather pushed res/com demand higher by 7.9 Bcf/d w-o-w to average 35.0 Bcf/d.
**Industrial gas demand increased 500 MMcf/d w-o-w
**power demand increased 2.3 Bcf/d (12.9%) w-o-w
**US dry gas production fell by 500 MMcf/d (-0.7%) w-o-w to average 64.0 Bcf/d;
**Net imports increased 100 MMcf/d w-o-w to average 3.6 Bcf/d.
**Canadian imports increased 100 MMcf/d w-o-w (as imports into the Midwest and Northeast increased)
** Mexican pipeline exports increased 100 MMcf/d w-o-w to average 1.4 Bcf/d.
EARLY VIEW RANGE FOR NEXT WEEK: -52 to -78 Bcf
Last Year: -87 Bcf
5 Year Avg. -140 BcF
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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