US power burn demand averaged 24.6 Bcf/d for the week ending October 9, a drop of 2 Bcf/d from the week prior. Even with this decline in demand, this week's estimate for power burn is the highest level seen in an October (last week's estimate included some days in September). In fact, on October 7, US power burn set the single day record for October at 27.8 Bcf. Although temperatures were above normal this past week, the growth in power burn likely came as a result of the dip in Henry Hub cash prices this week compared to the week prior. US production averaged 71.9 Bcf/d this past week, a drop of 0.7 Bcf/d from the previous week. The decline was mostly due to maintenance events in the Northeast and a long the Gulf coast. In addition to this, many unplanned maintenance events at processing plants in the Rockies and Northeast contributed to this decline. As we head towards winter, and new takeaway capacity becomes operational in the Northeast, expect US production to rebound.
Both TGP and Transco require compressor station shut-ins at Stations 241 and 515, respectively. TGP's will last from Monday to Friday and will cut capacity to 0.82 Bcf/d from 1.03 Bcf/d on Segment 245, likely restricting flows based on the weekly average of 910 MMcf/d. Transco's shut-in is related to the Leidy Southeast project, where essentially all eastbound, non-firm transport will be restricted from October 13-31; total demand next week is expected to remain in-line with this week's average of 13.3 Bcf/d, but could place downward pressure at TGP Marcellus and Leidy-Transco.
SoCal Citygate cash basis rose 9 cents to $0.33/MMBtu for Friday’s gas day, its highest point in two weeks and having averaged $0.23/MMBtu since September 26. SoCal CG cash basis fell to just 7 cents last weekend as the OFO restricted volumes into the system, also aligning with weakness in Henry Hub cash prices that left outright prices at $2.34/MMBtu, the lowest in nearly 3.5 years. SoCal prices have seen upward pressure since the Aliso Canyon storage facility returned to service after a 10-day shut-in ended Monday. SoCal injections averaged 462 MMcf/d over the past four days, compared to an average of 345 MMcf/d during the Aliso Canyon force majeure. SoCal plans to replace turbines at Aliso Canyon between the end of October through March, cutting 400 MMcf/d of injection capacity through the end of November and then 300 MMcf/d through the duration of the maintenance, but the timing will allow injections to remain strong for another few weeks.