EMF Analytics: Natural Gas Supply/Demand Balance
BENTEK’s NEW Natural Gas Supply/Demand Balance Report Provides a Daily Picture of US Production, Consumption, Imports/Exports and Storage
The newest Energy Market Fundamentals (EMF) Analytics report from BENTEK uses the full resources of our data gathering and analytical systems to provide a daily assessment of the supply and disposition of natural gas in the United States. The Natural Gas Supply/Demand Balance Report provides an estimate of total US demand, production, imports/exports and storage injections/withdrawals.
Like all of our EMF reports, the Natural Gas Supply/Demand Balance Report derives its data from BENTEK Energy’s proprietary Energy Data Warehouse. This data collection and warehousing system collects data from a wide range of resources, including the gas flow and capacity postings from interstate pipelines. We then use this data to generate timely, accurate assessments of energy markets. Our new Supply/Demand report is our most comprehensive analysis of the individual components that comprise the daily picture of supply/demand across the US natural gas market.
The report’s Demand section provides regional totals from all delivery points on each interstate pipeline that are classified as demand points – power plants, local distribution companies, industrials, municipals, etc. We take all volumes scheduled into these points each day, use the total as a proxy for the demand for all facilities receiving gas via interstate pipelines, then model the demand received by all other facilities by correlating BENTEK demand data with historical demand data from the US Energy Information Administration (EIA). We go through the same process in the Supply section for gathering systems, natural gas processing plants, producing fields, etc. Daily Canadian Imports/Exports are summarized directly from pipeline receipts and deliveries and are near equivalent to EIA historical data. Similar modeling processes are used to estimate Mexico exports/imports. LNG imports are estimated by using LNG deliveries from each LNG terminal into the interstate pipelines attached to those terminals.
Each day there is a difference between total demand and total supply, and this difference is the implied storage injection/withdrawal. We compute this number on a daily basis and accumulate the daily changes over the EIA storage week to arrive at a projected estimate of the weekly EIA Working Gas in Underground Storage report.
Note that the storage number computed in our Natural Gas Supply/Demand Balance Report is not the same number that we compute in our Natural Gas Storage Outlook Report. The Storage Outlook is based on injections and withdrawals of each storage facility attached to interstate pipelines each week. The number in our Natural Gas Supply/Demand Balance is the difference between supply and demand modeled at an aggregated US level.
Why compute the same storage number two ways? We have two reasons. First, any methodology for computing the EIA storage number has some level of uncertainly, and that uncertainty profile changes over time. We believe the spread between the numbers predicted by our two methodologies will provide the means to better assess that level of uncertainty. Second, the Natural Gas Supply/Demand Balance Report provides the means to assess why the storage number behaves the way it does. The report indicates whether storage is changing because demand is up, supply is down, imports are off, etc. As with all of our daily natural gas market reports, all gas flow estimates are based on the pipelines’ Intraday 2 nomination cycle for all days except for the current day, which is based on the Evening cycle.
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