ARC Resources Ltd T.ARX

TD Notes

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The Gas Line

Weekly Gas Charts

Inventory Build In Line With Expectations: This morning we saw an inventory build which was in line with expectations (54 Bcf injection versus consensus for a 55 Bcf injection and the five-year average of 53 Bcf). We note that AECO basis remains very wide, which we believe is being driven by Canadian gas production growth, a variety of outages on the NGTL and Enbridge systems through fall, and potential delays with new egress additions. We recently published our views on exposure/CF sensitivities to further AECO pricing pressure for our Canadian natural-gas coverage group (here).

Quick Summary: Storage is 11% below the five-year average and 8% below year- ago levels. U.S. storage levels remain tight when compared with domestic/foreign demand (20% below normal levels as measured in days of supply, Exhibit 3). On this metric, we are still charting record-lows for this time of the year. Expectations for next week are for an injection of 50-70 Bcf, which compares with the five-year average injection of 72 Bcf.