Cold drives up the Canadian Natural Gas price

[dan_s]

It was a big week for AECO. Prices jumped to into the C$2.25-2.65 range as snow dumped on Calgary, forcing the annual flip from injection to withdraw a month earlier than expected. The cold weather forced the furnaces into action, lifting local demand to 5.6bcfd, up 27% y/y, and the cold weather looks to be here for at least another 2 weeks (more realistically 6 months!).The flow data for Alberta shows small draws each of the last 6 days, which we see offsetting small builds in BC to net out to zero for the week; we'll get this data point next week. This week, storage reported a 2bcf build, in-line with our forecast and half the 5-year normal build of 4bcf. Western Canada storage is 12% below the 5-year average, and factoring in the near-term weather forecast, we see this moving to 15% by the end of the month. Over at the Dawn hub, gas built by 13bcf, vs norms of 9, pushing storage to a 4% surplus vs. the 5-year average.

Very cold air driving down the U.S. Rockies now will move eastward next week.

See daily update here for details on the winter forecast: https://www.weatherbell.com/premium/

A tropical storm is developing now in the Gulf of Mexico that will hit the Louisiana coast by next weekend.