Tuesday, November 15, 2016

Western Canada Stores More Natural Gas, Exports Less in November

Strong AECO Hub pricing this month is pushing more gas into storage, and less across the US border.  High Canadian storage levels throughout the summer have been elevating exports, but that dynamic stalled at the beginning of November.  Last year, 15.8 BCF was injected on the TC NOVA System in October, while 7.8 BCF was withdrawn this year.  But as the chart shows, injections resumed on Nov 2 of this year, and have spiked to about 1 BCF per day over the last three days.  

Cumulative injections over the season show the November reversal from another angle, and indicate that there is room for at least a few BCF more in storage before winter withdrawals begin, if no home can be found for the gas.  A very mild start to winter in the US is the likely explanation for the recent stockpiling.

On the production front, the high Canadian gas rig counts have yet to translate into production growth, and current month output is comparable to 2015 levels.  Output on the system has averaged 10.8 BCFD this month, compared to 10.7 last year.  Output should rise seasonally in December, as autumn maintenance is completed.