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Natural Gas Weekly Update

for week ending January 25, 2017   |  Release date:  January 26, 2017   |  Next release:  February 2, 2017   |   Previous weeks


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

In the News:

Additions to data in the EIA Weekly Natural Gas Storage Report

EIA's Weekly Natural Gas Storage Report (WNGSR), released this morning, now includes a table of estimated measures of sampling variability. The working gas in storage estimates that EIA publishes in WNGSR are based on a survey sample of storage operators in the Lower 48 states. Like other sample surveys, the WNGSR is subject to sampling error—the error that occurs from observing a sample instead of observing a census of all known storage operators. EIA provides these data to help data users better understand the amount of sampling variability in weekly estimates computed from the WNGSR sample.

The new table in the WNGSR includes coefficients of variation (CVs) for estimates of working gas levels and standard errors (SEs) for estimates of weekly net changes. The SE is a statistical term for the measure of sampling variability of an estimate based on all possible outcomes from the sample, while the CV, or relative standard error, expresses the SE as a fraction of the published working gas estimate.

The SEs for estimates of weekly net changes average about 2 Bcf for the Lower 48 states and around 1 Bcf for each region, since April 2015. The CVs for the Lower 48 states are typically about 1% of working gas stocks, but can differ on a regional basis, reflecting the unique characteristics of each region. The SE for the published weekly net change in working natural gas tend to be larger when net changes in working gas are large in absolute value. For example, the SE ranged between 3.0 to 5.5 billion cubic feet (Bcf) during weeks when the net change exceeded 100 Bcf in 2016. Otherwise, the SE on the net change was generally 1.0 to 2.7 Bcf.

The SE for a published estimate of weekly stocks or weekly net change can be used to construct a confidence interval that is computed as a range centered about the estimate. The probability that the confidence interval contains the value based on a census survey of all known storage operators in the Lower 48 states is given by the specified level of confidence. For example, the published weekly estimate of the net withdrawal for the week ending January 20 is 119 Bcf and the SE of the net change is 1.9 Bcf. As a result, the 95% confidence interval (i.e., two standard deviations) includes values within 6 Bcf of the estimate, or 113 Bcf to 125 Bcf.

Overview:

(For the Week Ending Wednesday, January 25, 2017)

  • Natural gas spot prices were mixed this report week (Wednesday, January 18 to Wednesday, January 25). The Henry Hub spot price remained flat at $3.25 per million British thermal units (MMBtu).
  • At the New York Mercantile Exchange (Nymex), the February 2017 contract rose 3¢ from $3.302/MMBtu last Wednesday to $3.332/MMBtu yesterday.
  • Net withdrawals from working gas in storage totaled 119 billion cubic feet (Bcf) for the week ending January 20. Working natural gas stocks are 2,798 Bcf, which is 11% less than the year-ago level and 1% less than the five-year (2012–16) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 13¢, closing at $6.63/MMBtu for the week ending January 20. The price of natural gasoline and ethane fell by 4% and 12%, respectively. The price of propane and isobutane both rose by 2%. The price of butane remained flat week over week.
  • According to Baker Hughes, for the week ending Friday, January 20, the natural gas rig count increased by 6 to 142. The number of oil-directed rigs rose by 29 to 551. The total rig count climbed by 35, and it now stands at 694.

more summary data

Prices/Supply/Demand:

Price movements mixed around the country. This report week (Wednesday, January 18 to Wednesday, January 25), the Henry Hub spot price remained flat week over week at $3.25/MMBtu. At the Chicago Citygate, prices were also unchanged from last Wednesday at $3.22/MMBtu.

Prices at PG&E Citygate in Northern California gained 5¢, up from $3.61/MMBtu last Wednesday to $3.66/MMBtu yesterday. The price at SoCal Citygate rose 6¢ from $3.60/MMBtu last Wednesday to $3.66/MMBtu yesterday.

Northeast price movements mixed. At the Algonquin Citygate, which serves Boston-area consumers, prices went down 5¢ from $3.61/MMBtu last Wednesday to $3.56/MMBtu yesterday, after hitting a low of $3.24/MMBtu on Friday. At the Transcontinental Pipeline Zone 6 trading point for New York, prices remained unchanged week over week at $3.18/MMBtu, though they dipped as low as $3.02/MMBtu on Friday. Prices at Dominion South in northwest Pennsylvania rose 5¢ from $2.95/MMBtu last Wednesday to $3.00/MMBtu yesterday.

February Nymex contract rises slightly. At the Nymex, the price of the February 2017 contract increased 3¢, from $3.302/MMBtu last Wednesday to $3.332/MMBtu yesterday. The price of the 12-month strip averaging February 2017 through January 2018 futures contracts climbed 6¢ to $3.459/MMBtu.

Supply remains flat. According to data from PointLogic, the average total supply of natural gas remained the same as the previous report week, averaging 76.5 Bcf/d. Dry natural gas production remained constant week over week. Average net imports from Canada decreased by 1% from last week.

Demand falls with warmer weather. Total U.S. consumption of natural gas fell by 8% compared with the previous report week, according to data from PointLogic. Power burn declined by 2% week over week, while industrial sector consumption decreased by 3% week over week. In the residential and commercial sectors, consumption declined by 15% to average 31.6 Bcf/d, 36% below the same week in 2016. All other non-export demand was also below the same week last year. Natural gas exports to Mexico increased 4% week over week.

U.S. liquefied natural gas (LNG) exports. Natural gas pipeline deliveries to the Sabine Pass liquefaction terminal averaged 1.8 Bcf/d for the report week, indicating the ongoing commissioning of Train 3. Two vessels (combined LNG-carrying capacity of 7.6 Bcf) departed Sabine Pass last week, and two vessels (7.4 Bcf in total) are currently loading at the terminal.

more price data

Storage:

Warmer-than-normal weather leads to relatively modest net withdrawal. Net withdrawals from storage totaled 119 Bcf, compared with the five-year (2012–16) average net withdrawal of 176 Bcf and last year's net withdrawals of 202 Bcf during the same week. Warmer-than-normal temperatures throughout most of the Lower 48 states mitigated heating demand for gas and contributed to the below-average withdrawals from storage. Working gas stocks total 2,798 Bcf, which is 20 Bcf less than the five-year average and 348 Bcf less than last year at this time.

Southern California Gas withdraws natural gas from Aliso Canyon. On January 24, 2017, Southern California Gas (SoCalGas) withdrew working gas from the natural gas storage facility at Aliso Canyon for the first time since January 2016, according to an announcement by SoCalGas. Increased demand, driven by weather conditions, led to the withdrawals. These withdrawals were followed by an advisory issued by SoCalGas on January 23 to its customers to reduce consumption and a curtailment of natural gas deliveries to noncore customers, including large commercial and industrial users. Withdrawals from Aliso Canyon also occurred on January 25. The withdrawals were only from wells that the Division of Oil, Gas, and Natural Resources approved for use, and they were executed under the California Public Utilities Commission's Aliso Canyon Withdrawal Protocol. The volumes of the withdrawals from Aliso Canyon were not reported. However, total withdrawals from working gas storage on the SoCalGas system totaled nearly 2 Bcf between January 24 and 25.

Withdrawals during the current heating season remain ahead of five-year average pace. Despite the significantly smaller-than-normal withdrawals this storage week, withdrawals from storage are ahead of the average pace so far for the 2016–17 heating season compared with previous years. Working gas levels declined 1,236 Bcf from November 8, 2016 (a seasonal peak), to January 20, 2017. This total net withdrawal is the second largest over the comparable period since 2010—the beginning of EIA's five-region weekly working gas history. The five-year average pull over this period is 1,058 Bcf.

Net withdrawals are in line with market expectations. According to the Bloomberg survey of natural gas analysts, estimates of net natural gas withdrawals from storage generally ranged from 109 Bcf to 129 Bcf, with a median of 120 Bcf. The price of the Nymex futures contract for March 2017 delivery at Henry Hub rose 2¢/MMBtu to $3.67 MMBtu in 603 trades at the release of the WNGSR. Trading on the February 2017 contract, which is due to expire on Friday, January 27, was light in trading at the release of the WNGSR.

Warming temperatures remain slightly higher than normal. Average temperatures in the Lower 48 states increased 8°F on the week and averaged 40°F. Temperatures for the week were 7°F higher than normal and 8°F higher than last year at this time. Cooling degree days (CDD) in the Lower 48 states totaled 3, compared to 0 last year and compared to a normal of 2. Temperatures in most regions outside the Pacific region were significantly above seasonal norms for the period. Heating degree days (HDD) in the Lower 48 states totaled 177, compared with 229 last year and a normal of 226.

more storage data

See also:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
19-Jan
Fri,
20-Jan
Mon,
23-Jan
Tue,
24-Jan
Wed,
25-Jan
Henry Hub
3.21
3.21
3.15
3.25
3.25
New York
3.11
3.02
3.08
3.12
3.18
Chicago
3.13
3.18
3.13
3.24
3.22
Cal. Comp. Avg.*
3.29
3.28
3.33
3.44
3.46
Futures ($/MMBtu)
February contract
3.368
3.204
3.243
3.279
3.332
March contract
3.360
3.211
3.257
3.295
3.346
*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: (1/19/17 - 1/25/17)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
78.9
78.6
81.5
Dry production
70.4
70.1
73.0
Net Canada imports
5.8
5.9
6.6
LNG pipeline deliveries
0.3
0.3
0.6
Total supply
76.5
76.3
80.3

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline deliveries represent gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (1/19/17 - 1/25/17)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
74.4
81.0
100.3
    Power
20.8
21.2
27.1
    Industrial
22.0
22.5
23.6
    Residential/commercial
31.6
37.3
49.6
Mexico exports
4.0
3.8
2.9
Pipeline fuel use/losses
5.8
6.3
7.8
LNG pipeline receipts
2.0
1.9
0.0
Total demand
86.2
93.1
111.1

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Fri, January 20, 2017
Change from
 
last week
last year
Oil rigs
551
5.6%
8.0%
Natural gas rigs
142
4.4%
11.8%
Miscellaneous
1
0.0%
0.0%
Rig numbers by type
Fri, January 20, 2017
Change from
 
last week
last year
Vertical
75
19.0%
-2.6%
Horizontal
559
4.1%
11.8%
Directional
60
1.7%
0.0%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2017-01-20
2017-01-13
change
East
596
639
-43
Midwest
757
795
-38
Mountain
173
183
-10
Pacific
235
248
-13
South Central
1,037
1,052
-15
Total
2,798
2,917
-119
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(1/20/16)
5-year average
(2012-2016)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
713
-16.4
660
-9.7
Midwest
830
-8.8
741
2.2
Mountain
166
4.2
158
9.5
Pacific
275
-14.5
270
-13.0
South Central
1,162
-10.8
989
4.9
Total
3,146
-11.1
2,818
-0.7
Source: U.S. Energy Information Administration


Temperature -- heating & cooling degree days (week ending Jan 19)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
228
-47
-36
0
0
0
Middle Atlantic
209
-53
-48
0
0
0
E N Central
233
-64
-85
0
0
0
W N Central
267
-51
-78
0
0
0
South Atlantic
93
-90
-103
12
4
9
E S Central
74
-115
-134
0
-2
0
W S Central
70
-70
-58
7
3
7
Mountain
223
-11
2
0
0
0
Pacific
138
17
31
0
-1
0
United States
177
-49
-52
3
1
3
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Jan 19, 2017

Mean Temperature (F) 7-Day Mean ending Jan 19, 2017

Source: NOAA National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Jan 19, 2017

Mean Temperature Anomaly (F) 7-Day Mean ending Jan 19, 2017

Source: NOAA National Weather Service