MCX Natural Gas Alert – Above 215 Buy on Dips Target 227—232 – Neal Bhai Reports
Total Supply/Demand Balance
We estimate that aggregate demand for American natural gas (consumption + exports) totaled around 535 bcf for the week ending September 21 (up 7.0% w-o-w and up as much as 13.0% y-o-y). The deviation from the norm stayed positive and actually surged from +22% to +32% (see the chart below).
Overall, total energy demand (measured in total degree-days) was above last year’s level by around 12%. Seasonal trends call for a declining number of CDDs and TDDs. Natural gas consumption should hit a trough at the end of September or early October.
According to our calculations, aggregate demand for U.S. natural gas (on a weekly basis) has been above 9-year norm since February 24, 2017. The weather conditions heated up significantly across the country. We estimate that the number of nation-wide cooling degree-days (CDDs) jumped by no less than 30.0% w-o-w, for the week ending September 21. In addition, non-degree-day factors – such as higher nuclear outages – spurred additional consumption in the Electric Power sector.
Total exports increased by 6% w-o-w, mostly due to stronger LNG sales. According to Marine Traffic data, Sabine Pass and Cove Point together served at least 7 LNG tankers last week (total natural gas carrying capacity 25 bcf). In annual terms, total exports were up 35.0%. – Neal Bhai Reports
