Since the beginning of the month, Southeast net flows from the Northeast have averaged 1.9 Bcf/d. Not only does this mark an increase of about 0.7 Bcf/d from January levels, but it is also a complete change in direction of gas flow from last year, in which the Southeast sent about 3.1 Bcf/d to the North (see Fig. 1). If inter-regional flows maintain current levels through the end of the month, it will mark the strongest month for net receiving gas from the Northeast. Despite strong demand in February, Henry Hub has experienced downward pressure as strong inflows have been paired with both consistent production and persistent high storage levels. See page 2.
A sustained cold front in the forecast is expected to drive up total Northeast demand to just above 30 Bcf/d through the upcoming weekend. The sharp drop in temperatures and subsequent high-demand outlook has prompted several pipelines in the region to issue operational flow orders on concerns of over-deliveries and low system pressure. Algonquin, Equitrans, Nat. Fuel and Empire have all issued system-wide OFOs. Texas Eastern has ordered an OFO for M3, while Dominion has issued region-specific restrictions north of Sabinsville and on its PL-1 system in the southern portion of the pipeline's operating area, which includes deliveries into TETCO M3, WGL, and Transco. Increased demand in the region put upward pressure on cash prices around Northeast demand centers in Wednesday's trading. In the New York area, Transco Zone 6-NY and Iroquois Zone 2 each settled at $6.06/MMBtu and $6.14/MMBtu, respectively. Further north, delivered gas into New England at TGP Zone 6-200L and Algonquin Citygates settled at a respective $6.47/MMBtu and $7.03/MMBtu for Thursday's flow. Cash prices at Leidy-Transco and TGP-Marcellus traded down slightly as production continues to hold near 23 Bcf/d.
Dry gas production has fallen roughly 0.1 Bcf/d from yesterday's record-high 73.22 Bcf/d, which topped the previous record set in April 2015. Today's production estimate in the Northeast, at 23.03 Bcf/d, marks a record high for the region, which has seen month-to-date production increase by 870 MMcf/d from the January daily average. Despite the small US production decline, total US supply has increased by 0.5 Bcf/d overall due to a roughly 300 MMcf/d increase in both LNG sendout and imports from Canada. Below-normal temperatures across much of the Midcon and Northeast have boosted US ResComm demand to 53.4 Bcf/d, a 4.2 Bcf/d increase day-over-day, and 10 Bcf/d over the prior seven-day average. Power burn fell by nearly 1.6 Bcf/d today. Total US demand is expected to fall by 4.3 Bcf/d tomorrow, led by the Southeast and Northeast losing 1.7 Bcf/d and 1.4 Bcf/d respectively.