Friday, December 9, 2016

Weather Forecast: Reduced Demand

The 12Z forecast this morning has extreme cold isolated in the 6-10 day range, though that period is still extraordinarily cold.  It could test the susceptibility of northern US natural gas production to freeze-offs, as it already seems to be impacting western Canada.

Alberta production is off more than 1.3 BCFD from recent highs, coincident with the cold weather.  The chart below shows the daily production as dots, and the monthly average as lines.  December production has been about 10 BCFD over the last three days, after peaking above 11.3 BCFD in the first week of December.  This has also coincided with huge draws from storage, as they've pulled about 3BCFD out over the last three days as well, taking a bit bite out of their surplus.