Analyzing EIA's Monthly Numbers for April

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Includes: GAZ, HNUZF, UNG, UNL
by: Bill Francis

Production

The recent EIA report is estimating that dry gas production for April ’10 was 59.4 bcf/d. This number is less than 1% of the difference to March’s production, but was still less and following a trend in which I believe production is hitting a plateau in the near term. With how the price environment played out in May I see production numbers for next month staying the same if not trending a tad lower into the 58’s. Year over year we are still producing more gas at this time than last year in which we more or less had the same prices. April ’10 came in 2% above the same month in ’09 and year to date in 2010 we produced a total of 91 bcf more than ’09 and 372 bcf more than ’08 when prices were at points double that of this year. So we’re still producing more gas than years prior.

Consumption

I hope everyone enjoyed the great weather of April bc it looked to have brought in some weak consumption numbers. April demand figures are always going to be below March’s as it is usually the first month we turn to being a net injector, rather than having a net withdrawal in March. Total consumption for April ran about 1.5 bcf/d below year ago levels or a 2.5% drop. Most of this can be blamed on the luke warm temperatures we experienced since residential and commercial sectors fell the most from March. April’s consumption number for Residences dropped by almost half of what we burned up in March. We also burned 20% more natural gas in our homes last year in April as opposed to this year.

The Industrial sector was estimated to have used 17.4 bcf/d of natural gas in April. I think this was a strong number, surpassing last year’s industrial usage by around 7%. This was even with residential and commercial numbers losing ground against last year. Still not the answer we’re looking for in which industrial would top the pre crisis numbers, but each month it seems to be getting closer. In April of 2010 our factories, chemical plants and other industrial users are consuming 6% less gas than before the Housing bubble put a freeze on free and easy lending, in the same month of 2008.

In the power generation department we used 8% more gas to fire up our turbines in April than in March. This wasn’t too hard though as March’s electrical numbers were disappointing and prices were lower throughout April. April returned to the trend of the first two months of the year of outpacing their monthly 2009, and 2008 counterparts, which was reassuring. We used an average of 15.8 bcf/d to make electricity in April ‘10 as opposed to 14.7, and 15.6 bcf/d in 2009 and 2008 respectively. Not a huge gain by any means but enough to put back together an almost non-stop trend of recurring growth in the electrical power sector that I discussed in a previous post.

Imports

America ended up taking in almost exactly the same amount of pipeline gas imports as last year, but LNG lagged last years April numbers. We still took in a mixed batch of LNG from 5 different importers, but we only regassed 41 bcf or a little more than a 1 bcf/d. In April 2009 we brought in 56 bcf or over 1/3 more LNG imports from this year.

Disclosure: No position