Tuesday, January 21, 2014

Weather Driven Natural Gas Demand

After a cold NOV-DEC, January has been uneven.  The polar vortex came and went, with some warm weather in between.  A look at the Gas-Weighted Heating Degree Days shows that the 4 weeks in 2014 (including this week) are running about 7 HDD's above a normal 898, which is not so exceptional as the headlines would suggest.  The long term forecast looks colder than average.

Last year during the comparable 4 weeks, the US saw 57 fewer HDDs than this year.

Despite what should be three months of anomalous cold, natural gas is struggling to hold $4.  Inventories will be low as we exit winter, still aiming around 1.2 to 1.3 TCF, about 400-500 BCF below last year.

Here is the NOAA weekly weather data:      (PDF here)