LNG and imports from Canada both gained week to week and while overall imports are still down 1 Bcfgpd YoY this is the closest they have come to year ago figures in many months. This is also the should season for LNG coming to the U.S. so this is to be expected but if LNG tips ahead of year ago levels it could be the harbinger of one last bout of pre cold selling in natural gas.
Weather: Cooling degree days of 44 vs 59 last week and 57 in the year ago period. This more seasonal normal weather will reduce the sting of storm related shut ins until next week’s number arrives.
Ike Impact: Offshore about 39 Bcf did not get produced for the reporting period, off slightly from the shut in gas number in the prior week from Gustav. Next week however, we get our first look at Ike’s discombobulation of the onshore gas processing industry.
Street Consensus Number: 61 Bcf Injection (range of 48 to 76 Bcf) ~ from the Reuters Survey.
ZComment: The impact of Gustav / Ike should put storage on track for a meeting with 3.4 Tcf but the issue on the minds of traders and the Street remains the potential for a 2009 gas glut where production drives a record rebuild in storage next year. As you know I think the case for the glut, while arguable is a bit thin. Price takes care of price.
Oil Inventory Review - Bigger than expected draw on crude, largely ignored since the numbers are Gustaved and Iked.
CRUDE OIL - Another bigger than expected draw on crude stocks.
Refineries Still Hampered By Storm Related Shut Ins.
Imports Down Due To Storm…Expect them to return to something closer to normal in about 2 weeks.
Production fell further last week to 3.988 mm bopd. This year U.S production had been running near record levels before hurricane the storm related shutterings even though utilization has been on the low side of normal. While a majority of this production will bounce back in the near term it is likely some projects will be delayed for at least several weeks, further shoring up product pricing.
GASOLINE - U.S. Gasoline inventories are at an 18 year low at least. This is as far back as the EIA’s weekly inventory data goes. The DOE is considering asking the IAEA for a products release from their reserves to help alleviate tightness in the gasoline markets while the EPA has relaxed environmental standards for gasoline since Gustav hit.
Gasoline Stocks: I’ll just say it one last time…18 year lows.
