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‹ See the most recent Natural Gas Weekly Update

Natural Gas Weekly Update

for week ending October 2, 2013   |  Release date:  October 3, 2013   |  Next release:  October 10, 2013   |   Previous weeks

JUMP TO: In The News | Overview | Prices/Supply/Demand | Storage

In the News:

New lateral increases customer access to Denver-Julesburg gas production

Full service is expected to begin by November on the High Plains pipeline’s newly built Lancaster Lateral in northern Colorado. Once this occurs, High Plains, which is part of Kinder Morgan subsidiary El Paso Pipeline Partners’ Colorado Interstate Gas (CIG) pipeline system, would have firm contract agreements to carry 0.22 billion cubic feet per day (Bcf/d) and could eventually carry 0.59 Bcf/d of additional natural gas from the Denver-Julesburg production basin 7.5 miles north to the Cheyenne Hub interconnect in Weld County, Colorado, near the state’s border with Wyoming. The Lateral is an expansion on the 164 miles of pipeline built under the High Plains Expansion Project, developed by CIG and utility company Xcel Energy, which provides 0.87 Bcf/d of service to natural gas consumers in Weld County, Adams County and Morgan County, Colorado.

At Cheyenne Hub, the Lancaster Lateral will interconnect with El Paso’s Wyoming Interstate (WIC) pipeline at the Flying Hawk metering station, which the project would modify to allow for bidirectional gas flows. This would enable CIG gas delivered at Flying Hawk to be transported to WIC’s interconnects with the Rockies Express Pipeline (REX), which runs through the midwestern United States to the Ohio-Pennsylvania border, as well as El Paso’s Cheyenne Plains pipeline, which extends into south-central Kansas and connects with pipelines serving midwestern and eastern markets. WIC can also carry gas west from Cheyenne Hub 800 miles into western Wyoming, where it interconnects at Opal Hub with Kinder Morgan’s Ruby Pipeline, which flows natural gas to consumers in Nevada, California, and the Pacific Northwest.

On September 19, limited initial service began at the La Salle metering station, one of two new receipt points being added to the High Plains System together with the Lancaster Lateral. Both metering stations will receive gas produced from the liquids-rich Denver-Julesburg Basin. Denver-Julesburg natural gas production from January 1 through September 30 rose to 0.8 Bcf/d, 15.4% above production levels from January 1, 2012, through September 30, 2012, according to EIA calculations using data from Bentek Energy LLC.

Overview:

(For the Week Ending Wednesday, October 2, 2013)

  • Natural gas hub prices were generally flat over the report week (Wednesday to Wednesday), with a slight increase on Monday and Tuesday of this week. The Henry Hub spot price closed yesterday at $3.61 per million British thermal units (MMBtu), up 9 cents per MMBtu from the beginning of the report week.
  • At the Nymex, futures prices increased. The October 2013 contract closed trading on Thursday, September 26 at $3.498 per MMBtu. The November 2013 contract became the front-month contract on Friday, September 27, when it traded at $3.589 per MMBtu, and decreased by 5 cents per MMBtu to close trading yesterday at $3.542 per MMBtu.
  • Working natural gas in storage increased to 3,487 Bcf as of Friday, September 27, according to the U.S. Energy Information Administration's (EIA) Weekly Natural Gas Storage Report (WNGSR). A net storage injection of 101 Bcf for the week resulted in storage levels 4.3% below year-ago levels but 1.4% above the 5-year average.
  • The Baker Hughes natural gas rotary rig count totaled 376 active units as of Friday, September 27, a decrease of 10 rigs from the previous week, following last week’s decrease of 15 rigs. The oil rig count decreased by 7 to 1,362, following last week’s increase of 8 rigs. The total U.S. rig count was 1,744.
  • The weekly average natural gas plant liquids composite price decreased by 3.2%, this week (covering September 23 through 27) compared to the previous week, its fourth consecutive weekly decrease, and is now at $10.17 per MMBtu. The price for propane decreased by 6.0% to $11.53 per MMBtu, while natural gasoline decreased 4.3% to $19.04 per MMBtu and ethane decreased by 2.3% to $3.30 per MMBtu. The price for isobutane increased by 1.9% to $14.65 per MMBtu, while the price for butane increased by 1.1% to $13.27 per MMBtu.

more summary data

Prices/Demand/Supply:

Natural gas prices at most major hubs rose between 9 cents and 30 cents Wednesday to Wednesday of the report week, following dips at the end of last week. With cooler weather, natural gas spot prices decreased at most major hubs from Wednesday, September 25, to Friday, September 27. From Wednesday to Friday, prices at the Algonquin Citygate, which serves the Boston market, fell 14 cents per MMBtu; similarly, prices at the Transco Zone 6-New York trading hub fell 12 cents per MMBtu. Price decreases were not isolated to the Northeast; the Southern California Border average price decreased by 9 cents per MMBtu from Wednesday to Friday, while the Chicago Citygate price decreased by 6 cents, and the spot price at Kern River, which serves the Rocky Mountain region, decreased by 5 cents. The Henry Hub spot price had a more modest decrease Wednesday to Friday of 2 cents.

As temperatures increased from Friday, September 27, to Wednesday, October 2, prices rebounded at most locations. Over this time period, prices rose by 45 cents at Norwest Sumas, 30 cents at Transco Zone 6-New York, 29 cents at Algonquin Citygate, 31 cents at Kern River and Opal, and 23 cents at Chicago Citygate. The Southern California Border Average also rose by 25 cents, while the Henry Hub spot price rose by 11 cents.

At the Nymex, the front-month contract was flat. The price of the November 2013 contract was essentially flat for the report week. The November 2013 contract took over as the front-month contract on Friday, September 27, when it traded at $3.589 per MMBtu, 9 cents higher than the price that the October 2013 contract closed at on Thursday, October 26, its final day of trading. From Friday, September 27, to Wednesday, October 2, the November 2013 contract traded down by 5 cents to close at $3.542 per MMBtu, after having traded up by more than 4 cents from Wednesday, September 25, to Friday, September 27.

Consumption decreased slightly during the report week, as natural gas consumption for electric power was little changed. Total consumption in the Lower 48 states decreased for the third straight week, to an average of 56.1 Bcf/d, 0.7% below last week, according to data from Bentek Energy. This occurred despite a 0.3% increase in average daily natural gas consumption for electric generation (power burn), which reached 21.0 Bcf/d this week. This increase totaled less than 0.1 Bcf/d and was more than outweighed by a combined 0.4 Bcf/d decrease in residential/commercial consumption (0.2 Bcf/d), industrial consumption (0.1 Bcf/d), and Mexican exports (0.1 Bcf/d).

Natural gas consumption for power burn in the Lower 48 decreased by 2.7 Bcf/d, or 12%, from Thursday, September 26, to Sunday, September 29. This included decreases of 1.1 Bcf/d in Texas, 0.5 Bcf/d in the Midwest, Midcontinent, and Northeast, and 0.3 Bcf/d in the Southeast. As temperatures increased at the beginning of this week, power burn rose by 4.7 Bcf/d in the Lower 48. This included increases of 1.7 Bcf/d in the Northeast, 1.4 Bcf/d in Texas, 1.0 Bcf/d in the Southeast, 0.4 Bcf/d in the Midwest and 0.3 Bcf/d in the Midcontinent region.

Supply increased slightly during the report week. Total supply this week increased by 0.3% over last week to 69.3 Bcf/d, and ended three straight weeks of decreases after peaking at 70.9 Bcf/d for the report week ending on September 4. The 0.2 Bcf/d week-on-week increase in total supply occurred because of a 0.5 Bcf/d increase in dry production, which was partially offset by a 0.3 Bcf/d combined decrease in net imports from Canada (0.2 Bcf/d) and LNG sendout (0.1 Bcf/d).

There was a significant drop in Canadian net exports to the Midwest, which fell from 2.4 Bcf/d on Monday, September 30, to 0.6 Bcf/d on Tuesday, October 1, before finishing the report week on Wednesday, October 2, at 0.5 Bcf/d. The decrease occurred due to an outage at the Northern Border Pipeline, which will be closed through Friday, as a portion of the pipeline in Montana is rerouted. Northern Border imports gas from western Canada and flows the gas to consumers in the midwestern United States.

more price data

Storage

Working natural gas in storage increased to 3,487 Bcf as of Friday, September 27. The 101-Bcf gain in storage levels was significantly larger than both the 77-Bcf injection that occurred during the same week in 2012 and the 5-year average increase of 82 Bcf. Current inventories are 155 Bcf (4.3%) less than last year at this time, but 49 Bcf (1.4%) above the 5-year average of 3,438 Bcf.

The net injection was larger than market expectations of 95 Bcf. The larger-than-expected build contributed to natural gas prompt-month Nymex futures prices decreasing by about 4 cents per MMBtu to just around $3.50 per MMBtu immediately following WNGSR's release. In the hour following the release, prices remained at that level.

All three regions posted larger-than-average builds; East remains below 5-year average. Net injections in the East region were 58 Bcf this week, 9 Bcf larger than its 5-year average injection of 49 Bcf, and stocks remain 5.6% below the 5-year average for that region. Inventories in the Producing region grew by 33 Bcf this week, 7 Bcf larger than its 5-year average injection of 26 Bcf, and stocks in that region are 9.7% over its 5-year average levels. The West region grew by 10 Bcf, 2 Bcf larger than its 5-year injection of 8 Bcf.

Temperatures during the storage report week were close to normal. Temperatures in the Lower 48 states averaged 64.6 degrees for the week, 0.3 degree cooler than the 30-year normal temperature and 0.9 degree warmer than the same period last year.

more storage data

See also:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
26-Sep
Fri,
27-Sep
Mon,
30-Sep
Tue,
1-Oct
Wed,
2-Oct
Henry Hub
3.48
3.50
3.49
3.56
3.61
New York
3.46
3.45
3.65
3.72
3.75
Chicago
3.52
3.49
3.63
3.68
3.72
Cal. Comp. Avg,*
3.52
3.51
3.59
3.70
3.75
Futures ($/MMBtu)
October Contract
3.498
Expired
Expired
Expired
Expired
November Contract
3.567
3.589
3.560
3.609
3.542
December Contract
3.751
3.769
3.729
3.765
3.702
*Avg. of NGI's reported prices for: Malin, PG&E citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index
Natural gas futures prices
Natural gas liquids spot prices


U.S. Natural Gas Supply - Gas Week: (9/25/13 - 10/2/13)
Percent change for week compared with:
 
last year
last week
Gross Production
-0.06%
0.81%
Dry Production
-0.06%
0.81%
Canadian Imports
-12.20%
-3.89%
      West (Net)
8.64%
0.52%
      MidWest (Net)
-10.65%
-9.04%
      Northeast (Net)
-109.09%
111.40%
LNG Imports
-40.85%
-32.44%
Total Supply
-1.21%
0.32%
Source: BENTEK Energy LLC
U.S. Consumption - Gas Week: (9/25/13 - 10/2/13)
Percent change for week compared with:
 
last year
last week
U.S. Consumption
-7.55%
-0.55%
Power
-15.53%
0.26%
Industrial
-0.32%
-0.65%
Residential/Commercial
-2.93%
-1.67%
Total Demand
-7.70%
-0.71%
Source: BENTEK Energy LLC
Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Fri, September 27, 2013
Change from
 
last week
last year
Oil Rigs
1,362
-0.51%
-3.40%
Natural Gas Rigs
376
-2.59%
-13.56%
Miscellaneous
6
0.00%
100.00%
Rig Numbers by Type
Fri, September 27, 2013
Change from
 
last week
last year
Vertical
417
-0.95%
-18.87%
Horizontal
1,085
-0.55%
-4.99%
Directional
242
-2.81%
26.04%
Source: Baker Hughes Inc.


Working Gas in Underground Storage
Stocks
billion cubic feet (bcf)
Region
9/27/13
9/20/13
change
East
1,800
1,742
58
West
529
519
10
Producing
1,158
1,125
33
Total
3,487
3,386
101
Source: U.S. Energy Information Administration
Working Gas in Underground Storage
Historical Comparisons
Year ago
(9/27/12)
5-year average
(2008-2012)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,957
-8.0
1,906
-5.6
West
509
3.9
477
10.9
Producing
1,176
-1.5
1,056
9.7
Total
3,642
-4.3
3,438
1.4
Source: U.S. Energy Information Administration


Temperature -- Heating & Cooling Degree Days (week ending Sep 26)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
52
5
3
0
-1
0
Middle Atlantic
41
5
2
0
-7
0
E N Central
45
6
-31
6
-1
6
W N Central
31
-11
-32
10
-2
7
South Atlantic
15
1
-5
48
-3
3
E S Central
8
-5
-20
42
5
22
W S Central
2
-2
0
68
1
-4
Mountain
33
-13
12
30
-1
-16
Pacific
9
-5
5
13
-11
-33
United States
28
-1
-9
25
-3
-3
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Sep 26, 2013

Mean Temperature (F) 7-Day Mean ending Sep 26, 2013

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Sep 26, 2013

Mean Temperature Anomaly (F) 7-Day Mean ending Sep 26, 2013

Source: NOAA/National Weather Service