Dry gas production fell by 0.53 billion cubic feet per day (Bcf/d) this report week to average 92.5 Bcf/d. Demand from the power generation sector rose 1.50 Bcf/d to 38.5 bcf/d in the report week vs. the prior report week. However, demand data from other major sectors declined by a combined 0.25 Bcf/d or 1.75 Bcf compared to the prior week. Furthermore, dry gas imports from Canada rose by 0.44 Bcf/d.

While dry gas exports to Mexico declined from 5.51 Bcf/d to 5.43 Bcf/d for the report week, media outlets are reporting that the Sur de Texas-Tuxpan Natural Gas pipeline has been placed into service. The 2.6 Bcf/d pipeline will transport natural gas mainly from the Permian to Mexico to meet the country’s natural gas demands. We expect once the line fill is complete for storage levels in the South Part of Texas to decline from current level and for regional prices to show gains due to the increase in demand.

Our storage analysis leads us to expect a 76 Bcf build for the report week of September 13th. Our expectation is above the current 75 Bcf consensus whisper and 6 Bcf lower than the five-year average of 82 Bcf.

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