Henry Hub has surged sharply over the previous week, pushed by a basic winter squeeze slightly than a change in long-term fundamentals.
That’s what Ole R. Hvalbye, a commodities analyst at Skandinaviska Enskilda Banken AB (SEB), mentioned in a SEB report despatched to Rigzone on Thursday, which highlighted the “large rally in U.S. pure fuel”.
“Forecasts now level to effectively below-normal temperatures throughout massive components of the Decrease-48 from round 23 January into early February, notably within the jap half of the US,” Hvalbye said within the report.
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“We see temperatures at 5-10 levels under the 30-year regular! That is naturally lifting heating demand expectations at a delicate time of 12 months,” he added.
“In consequence, Henry Hub has seen a launch from … [around] $3 per MMBtu [million British thermal units] on the sixteenth of January to the present $5.3 per MMBtu, a rise of … [around] 80 % in solely 5 buying and selling days. Irregular? Sure, certainly,” he continued.
Within the report, Hvalbye famous that U.S. provide has tightened on the margin.
“Decrease-48 dry fuel manufacturing has dipped towards ~110.5 Bcfpd [billion cubic feet per day], down from above 112 Bcfpd earlier within the week, partly reflecting cold-weather disruptions,” he mentioned.
“LNG feedgas demand stays elevated at simply over 18 Bcfpd, although flows at Sabine Cross eased barely, partly offset by larger consumption at Elba Island,” he added.
Hvalbye additionally outlined within the report that positioning has amplified the transfer larger in Henry Hub.
“Futures buying and selling volumes hit report highs, and hedge funds have been pressured to cowl quick positions constructed in the course of the latest sell-off,” he mentioned.
In a media advisory despatched to Rigzone late Tuesday by the AccuWeather crew, AccuWeather warned that “a main winter storm is predicted to carry harmful ice and snow impacts to greater than 150 million individuals throughout greater than two dozen states beginning Friday and thru the weekend”.
“Extreme, long-lasting ice impacts are potential throughout components of Texas, Louisiana, Arkansas, Mississippi, Alabama, Georgia, South Carolina, and North Carolina,” the advisory mentioned, including that “danger of snow extends from the Plains and south-central U.S. by way of components of the mid-Atlantic and Northeast Friday by way of the weekend, with a foot or extra of snow potential in some areas”.
The advisory went on to warn {that a} “blast of dangerously chilly air will carry a number of the lowest temperatures up to now this winter to components of the northern and central U.S. later this week”.
In a observe up assertion despatched to Rigzone by the AccuWeather crew late Wednesday, AccuWeather warned that “important freezing rain and extreme icing are forecast from northern Texas throughout the south to the Carolinas”.
“A big zone of 6-12 inches of snow is anticipated from New Mexico and Texas to Virginia and alongside components of the I-95 hall within the mid-Atlantic and Northeast,” that assertion added.
“Widespread energy outages and main journey disruptions by floor, air, and rail might final for as much as every week or longer in areas hit hardest by the ice storm,” the assertion went on to warn.
On this assertion, AccuWeather Chief Meteorologist Jonathan Porter mentioned, “this storm is a uncommon, high-impact storm for the South”.
“Heavy ice accumulations adopted by a deep freeze can lock in harmful circumstances lengthy after the storm passes,” he added.
“Journey circumstances can quickly shift from manageable to unimaginable in a matter of minutes, particularly when temperatures drop and moist roads freeze. Anybody within the path of this storm ought to significantly rethink journey plans and be in a protected location earlier than circumstances deteriorate,” Porter continued.
“Folks within the path of this storm ought to put together to hunker down for the weekend,” Porter warned.
To contact the creator, e mail andreas.exarheas@rigzone.com
