EIA 102 Bcf gas draws driven by supply drop
Cold weather caused some production freeze-offs
15 December 2011 ¦ 14 pages
citigroupgeo.com
The EIA reported 102 Bcf of withdrawal for the week ending Dec 9, 10 Bcf larger
than the Bloomberg median of 92Bcf. East withdrawal was 50Bcf, but draws in the
Producing region and West were more impressive at 28Bcf and 24Bcf, respectively.
Overall Lower 48 gas-weighted HDDs rose from 115 in the week before to 158 last
week, but the biggest change was in West, where HDDs went from 27 to 45, coinciding
with production problems that reduced supply.
Near zero temperatures early last week caused production freeze-offs in the
southwest, affecting supply in the Producing region and exports to the West,
partly contributing to the higher than usual draws. Production fell in the San Juan and
Permian basins amid rising heating demand, besides scattered production declines
elsewhere in the Producing region. Further, a compressor fire in the Green River Basin
in the Rockies also choked off pipe flow. Overall Lower 48 production started the week
above 64Bcf/d but fell to 62.5Bcf/d by the middle of the week, before a slight recovery
on Friday, leading to about 1.5-2Bcf/d of production decline week-on-week in total.
Although Canadian imports did rise, it was still far from last year's level by as much as
2Bcf/d month-to-date.
The cold front certainly boosted demand in the Producing region, but gas-fired
generators seemed to be running more as well, with this phenomenon appearing
to be spreading to other regions. EEI's South Central weekly generation rose to
12.8TWh, higher than any December period since 2008. Gas demand-HDD intensities
were higher in both Producing and East. (Figures 23, 29, 35) While the year-on-year
shift up in demand has been more consistent in the Producing region, the rise in
demand intensity in the East in the last 4 weeks, departing from last year's trendline,
could signal more coal-to-gas switching in the region. Higher load would certainly allow
switching to occur at a fuller extent as dictated by the coal-gas price spreads, but lower
year-on-year coal utilizations, particularly in SERC based on Genscape's real-time
monitoring of coal generation, appear to translate into higher gas generation as well. |
