Friday, January 27, 2017

Heating Degree Day Comparisons

Gas prices have been struggling this month, with warm weather the chief culprit.  How is the current winter stacking up?  Well, the HDD count from Oct 1 through Jan 31 (next 4 day forecast assumed correct) puts this winter ahead of last winter by a 52 HDD margin.  

But we are behind the 20 year mean by a solid 299 HDD, which represents a tremendous amount of heating and electric load for natural gas.  I'm using the CPC numbers for gas-utility weighted HDDs in the calculation.  This suggests that gas could be very, very expensive had the weather been close to the mean, perhaps aiming toward a sub 1 TCF storage carryout in March/April.  That's a number that would light a fire, so to speak, under the Henry Hub forward strip.  

Here is the same data as a cumulation: