The Sabine Pass LNG export terminal appeared to begin its restart over the weekend, as feedgas volumes rose to as high as 325 MMcf/d on Sunday after seeing only nominal volumes in previous weeks. The slow ramp up in LNG exports did little to blunt the drop in overall demand from last week. Power demand averaged only 20.2 Bcf from Saturday through Monday compared to its peak over 29 Bcf last week. Power demand did see a modest 0.7 Bcf uptick on Monday, but remained well below prior week levels. ResComm demand continued its upward trend, averaging 19 Bcf over the past three days. Total US production appeared down around 0.2 Bcf, but a 0.25 Bcf increase in the Midcon sample from Friday to Monday was largely masked by a 0.23 Bcf drop in the Northeast that looks likely to be revised upward. Increased flows into the Northeast also spurred a 0.4 Bcf jump in Canadian imports.
Below-normal temperatures in the region are expected to put strong upward pressure on res/comm demand this week, with current forecasts showing total Northeast demand rising incrementally to as high as 17.3 Bcf/d by Wednesday's gas day. This figure would be comprised of close to 12 Bcf/d of res/comm demand and 5 Bcf/d of power demand, a notable shift from the previous week, during which temperatures averaging 10 degrees F above normal led to nearly equal pulls from both demand sectors. Power demand fell to a year-to-date low on Saturday's gas day, dropping by 2 Bcf/d over the course of two days as temperatures in the Northeast returned to normal for the season. Colder weather over the weekend drove similar, offsetting movements in the res/comm sector, where demand increased from 7.3 Bcf/d to 10.3 Bcf/d over just two days. A stronger demand pull may support higher production volumes in the region by two mechanisms, freeing up pipeline capacity as more gas is delivered off-system to meet demand deliveries, and by putting upward pressure on in-basin pricing. Production has been on a notable upward trend, with this weekend's 21.9 Bcf/d marking a 400 MMcf/d increase week-over-week.
Month-to-date US natural gas burn demand has averaged 24.7 Bcf/d, down 0.9 Bcf/d from the same period last year, a 3% decline. The decline comes mainly from the Southwest where power burn has averaged 3.2 Bcf/d, down 1.1 Bcf/d from October 2015. The drop is in part due to cooler temperatures in the region which have averaged 69 degrees Fahrenheit so far this month, 4 degrees Fahrenheit lower than October 2015 month-to-date. In addition, lower nuclear outages and considerably higher hydro and wind generation than the same time period last year have contributed. Daily Southwest nuclear outages have averaged 1.1 MW of generation, 41% lower than last October, resulting in approximately138 MMcf/d less gas burn demand. According to NRC nuclear generator status data, the Diablo Canyon unit 1 returned to service on October 22 but Palo Verde unit 3 generator is still offline for refueling and can be expected to remain so for the remainder of the month. In CAISO, wind generation has averaged the equivalent of 249 MMcf/d, up 90 MMcfe/d an increase of 57% while hydro is up 64% to 54 GWh, displacing approximately 400 MMcf/d of gas demand.