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Natural Gas Intelligence
Leticia Gonzales, Reporter
August 10, 2018

Genscape Inc. said compared to degree days and normal seasonality, the 46 Bcf injection is about 1.0 Bcf/d tight versus the five-year average. And while the latest EIA report helped to slightly close the year/year deficit, the deficit to the five-year average actually widened once again, and inventories are the lowest they have been at this time in the last five years. The data and analytics firm agreed that the situation shows no signs of correcting in the EIA’s Aug. 16 report: its supply/demand model’s preliminary estimate for the week ending Aug. 10 is showing an injection of only 39 Bcf. “While we do show production holding above the 80 Bcf mark, power burns this week have been strong, having topped the 40 Bcf/d level on a couple of days, sustaining what has come to be the strongest summer-to-date for burns in the past five years,” Genscape senior natural gas analyst Rick Margolin said. He noted, however, that Genscape’s storage estimate is early and not its composite estimate, which includes its storage sample. “But at the moment, if realized, we would be looking at an injection about 40% smaller than last year and the five-year average for that week,” Margolin said.

Reuters
Andres Guerra Luz, Scott DiSivano, Reporters
August 10, 2018

U.S. natural gas exports to Mexico hit all-time highs this month, but a slower-than-expected build out of pipelines inside Mexico has kept increases far below available capacity at the border. The latest uptick in exports, driven by demand from Mexico’s power sector, occurred after several Mexican pipelines began operation, allowing U.S. companies to send more fuel across the border, RBN Energy said in a report. (For a graphic on U.S. natural gas exports to Mexico, see: tmsnrt.rs/2OoMqnv) Over the last decade, U.S. gas exports to Mexico via pipeline have more than tripled, to 4.9 billion cubic feet per day (bcfd) in August, according to Thomson Reuters data. One billion cubic feet is enough gas to fuel about five million U.S. homes.Still, that is less than half the available U.S. gas pipeline capacity to Mexico, which will increase to 13.5 bcfd by year-end when Enbridge Inc’s $1.6 billion Valley Crossing pipeline enters service. “There are a lot of projects to get gas across the border, but a lot of these are dependent on important lines within Mexico,” said Rick Margolin, a senior analyst at energy data provider Genscape. The completion of those pipelines on the Mexican side of the border are facing at least a year’s delay on average, according to Genscape. The U.S.-Mexico Nueva Era project, which includes the Impulsora pipeline in Texas, was originally expected to enter service in mid-2017 but did not become operational until mid-2018 due to construction delays on the Mexico side of the border.

Natural Gas Intelligence
Leticia Gonzales
August 09, 2018

Kyle Cooper of IAF Advisors projected a 47 Bcf build, EBW Analytics expected a 48 Bcf build, Genscape Inc. estimated a 50 Bcf build and a Bloomberg survey had a range of 35 Bcf to 64 Bcf, with a median 47 Bcf injection. The IntercontinentalExchange settled at a 48 Bcf build. Genscape said compared to degree days and normal seasonality over the five-year average, a 50 Bcf-plus injection would appear tight by (0.4) Bcf/d and would do little to shrink the running year-on-year and year-on-five-year inventory deficits. Power burns were estimated to have averaged 35.6 Bcf/d, helping maintain this summer’s spot as the five-year leader of power burns this summer-to-date, Genscape said. Mexican exports averaged 4.8 Bcf/d (including a 5 Bcf/d day) and liquefied natural gas sendout averaged 3.3 Bcf/d.

Natural Gas Intelligence
Leticia Gonzales, Reporter
August 08, 2018

Turning to the spot gas markets, prices were down almost across the board despite hot weather lingering in key demand regions for another day or so. SoCal Citygate prices continued to come off recent highs as demand has been downward trending during the last couple of days, according to Genscape Inc. Southern California Gas system demand earlier in the week was just above 2.6 Bcf/d, with Wednesday’s nominated demand expected to top out at 2.58 Bcf/d. “These levels are well shy of summer-to-date highs and levels that occurred during recent record-setting price spikes,” Genscape natural gas analyst Joe Bernardi said. In addition to slightly lower demand peaks during the current hot spell, SoCalGas has less competition for flowing supply than the last basis blowout event. Bernardi noted that demand in upstream Pacific Northwest, Rockies, Desert Southwest and Mexican markets has been more moderate, and power loads are currently being satisfied by a better-functioning transmission system unlike during the last heatwave event.

Natural Gas Intelligence
Leticia Gonzales
August 08, 2018

Turning to the spot gas markets, prices were down almost across the board despite hot weather lingering in key demand regions for another day or so. SoCal Citygate prices continued to come off recent highs as demand has been downward trending during the last couple of days, according to Genscape Inc. Southern California Gas system demand earlier in the week was just above 2.6 Bcf/d, with Wednesday’s nominated demand expected to top out at 2.58 Bcf/d. “These levels are well shy of summer-to-date highs and levels that occurred during recent record-setting price spikes,” Genscape natural gas analyst Joe Bernardi said. In addition to slightly lower demand peaks during the current hot spell, SoCalGas has less competition for flowing supply than the last basis blowout event. Bernardi noted that demand in upstream Pacific Northwest, Rockies, Desert Southwest and Mexican markets has been more moderate, and power loads are currently being satisfied by a better-functioning transmission system unlike during the last heatwave event. Furthermore, no additional pipeline capacity restrictions have been implemented prior to this current event, as one that was originally set to occur on Aug. 7-8 was cancelled in light of the projected demand. Still, “SoCalGas may not be out of the woods just yet,” Bernardi said.

Natural Gas Intelligence
Leticia Gonzales, Reporte
August 07, 2018
As for the rebound in production, that may have to wait a bit longer as Genscape Inc. on Tuesday reported that Lower 48 production is down more than 1 Bcf/d day/day (d/d). Rockies production alone is down more than 0.7 Bcf/d. There is about 0.4 Bcf/d of volume lost from the shutdown of Enterprise Products Partner LP’s 1.8 Bcf/d Meeker Gas Plant in the northwestern Colorado portion of the Piceance Basin, with Rockies Express Pipeline receipts most impacted, it said. Unlike other processing complexes in the Rockies, reroute options out of Meeker are limited, Genscape senior natural gas analyst Rick Margolin said. “To the north in Wyoming’s Green River Basin, we are seeing more than 0.1 Bcf/d of drops” as scheduled maintenance on the Trailblazer and Wyoming Interstate Co. pipelines were likely to compel some shut-ins. Elsewhere, Texas production is modelled to be down nearly 0.3 Bcf/d d/d, and Northeast volumes are down a total of just 0.17 Bcf/d d/d: some gains in Pennsylvania output are offsetting a greater than 0.35 Bcf/d d/d decline in West Virginia output, where Columbia Gas Transmission (TCO) receipts from the MarkWest Sherwood processing plant are down more than 0.61 Bcf/d.
Bloomberg
Dan Murtaugh, Stephen Stapczynski, Reporters
August 05, 2018

Chinese President Xi Jinping’s trade policies are threatening to make his environmental goals more costly to meet. The world’s biggest gas importer included U.S. liquefied natural gas on a list of goods Friday that could be hit with a 25 percent duty. While no date has been set to implement the tariff, the announcement comes just a few months ahead of winter, when Chinese demand for the U.S. heating fuel is likely to peak. That Chinese policy makers would now take aim at U.S. LNG, which had been missing from previously targeted goods, signals that Xi may be willing to suffer some pain in order not to back down from President Donald Trump’s escalating trade dispute. His government’s clean-air push has made China the world’s largest buyer of natural gas, and erecting barriers to U.S. supplies could force the country to pay a premium this winter.

Bloomberg
Dan Murtaugh, Stephen Stapczynski, Reporters
August 05, 2018

Chinese President Xi Jinping’s trade policies are threatening to make his environmental goals more costly to meet. The world’s biggest gas importer included U.S. liquefied natural gas on a list of goods Friday that could be hit with a 25 percent duty. While no date has been set to implement the tariff, the announcement comes just a few months ahead of winter, when Chinese demand for the U.S. heating fuel is likely to peak. That Chinese policy makers would now take aim at U.S. LNG, which had been missing from previously targeted goods, signals that Xi may be willing to suffer some pain in order not to back down from President Donald Trump’s escalating trade dispute. His government’s clean-air push has made China the world’s largest buyer of natural gas, and erecting barriers to U.S. supplies could force the country to pay a premium this winter.

CNBC Worldwide Exchange
Clay Seigle with Brian Sullivan
August 03, 2018

Clay Seigle, Genscape Managing Director, Oil, talks about current challenges in the oil market causing prices to slip.

Bloomberg
Tim Loh, Brianna Jackson
August 02, 2018

Welcome back to sticky, sultry August in New York. If you found yourself melting away in the Big Apple during Wednesday night’s mugginess, you weren’t alone. The dew point, a measure of humidity, reached into the mid-70s, a level that can only be described as “oppressive,” according to Michael DuBois, an analyst at Genscape Inc. That prompted residents to run air conditioners and fans at full blast -- and leave them going late into the night when many of the region’s power generators typically slow down or come offline. That sent wholesale power prices in New York City soaring more than 13-fold between 10 p.m. and 11 p.m. from the same hour the day before. Electricity prices reached $429.70 a megawatt-hour, the highest level for that period since January 2014 and well above the average of $33.49 during the past year. Relative humidity averaged 82 percent on Wednesday in Central Park, according to the National Weather Service.

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