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Natural Gas Weekly Update

for week ending September 30, 2015   |  Release date:  October 1, 2015   |  Next release:  October 8, 2015   |   Previous weeks

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

In the News:

U.S. Northeast natural gas exports to Canada growing

Since May, the Northeast region of the United States has been exporting more natural gas to Canada than it has been importing, making it a seasonal net-natural gas exporter. Northeast exports have averaged 150 million cubic feet per day (MMcf/d) during the period May through September, according to data from Bentek Energy. Although these exports are small when compared to the total monthly net U.S. natural gas imports from Canada of 5.3 Billion cubic feet per day (Bcf/d), this marks the first time that the Northeast has had five consecutive months of net exports.

Monthly net exports from the Northeast to Canada first started in summer 2013 and have continued each summer since. According to EIA data, most of these exports are crossing the border in New York, and were facilitated by the Tennessee Gas Pipeline Company's (TGP) Northeast Supply Diversification (NSD) pipeline project. This project which included 6.8-mile, 30-inch-diameter of new pipe as well as leased capacity from Dominion pipeline, boosted TGP's pipeline capacity, enabling it to deliver an additional 244 MMcf/d of Marcellus Shale gas along its 300 Line system, and to move gas to New England markets and the Niagara Falls area of New York via its interconnected TGP 200 Line system, which interconnects at Niagara Falls with TransCanada's Canadian Mainline.

Export capacity is set to increase again as projects from TGP and National Fuel pipeline companies come online at the end of the year. Like the NSD project, , these two interconnected projects support the delivery of Marcellus-sourced natural gas to northern New York and eastern Canadian markets. The Northern Access 2015 Project, which will increase capacity into the region by 140 MMcf/d, and the Niagara Expansion Project, which increases capacity by approximately 155 MMcf/d, will focus on modifications and new construction of compressor stations and pressure regulating facilities, with some additional pipeline looping.

Net exports may continue with a mild October, but the coming winter likely will return the Northeast to being a regional importer of gas from Canada.

Overview:

(For the Week Ending Wednesday, September 30, 2015)

  • Natural gas prices declined in most market locations, falling from already generally low levels, over the report week (Wednesday, September 23, to Wednesday, September 30). The Henry Hub spot price fell from $2.59 per million British thermal units (MMBtu) last Wednesday to $2.47/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the October contract expired on Monday at $2.563/MMBtu, and the November contract moved into the near-month position. Over the report week, the November contract fell from $2.638/MMBtu last Wednesday to $2.524/MMBtu yesterday.
  • Working natural gas in storage increased to 3,538 Bcf as of Friday, September 25. A net injection into storage of 98 Bcf for the week resulted in storage levels 15% above a year ago and 5% above the five-year average for this week.
  • The total rig count declined by four units from the previous week, with 838 units in service as of September 25, according to data released by Baker Hughes Inc. This was 1,093 units below the number of rigs during the same week last year. The oil rig count decreased by four units to 640, while the gas rig count declined by one unit to 197. The natural gas plant liquids composite price at Mont Belvieu increased by 3.1% to $5.01/MMBtu for the week ending September 25. Butane and isobutane prices both increased by 5.7%, and propane and ethane prices increased by 4.4% and 2.5%, respectively. The natural gasoline price fell by 0.9%.
  • Hurricane Joaquin strengthened to a Category 4 storm on Thursday, which includes winds of up to 156 miles per hour. The storm's path is uncertain but could make landfall on the East Coast this weekend, when power outages are a possibility. Prices

more summary data

Prices/Demand/Supply:

With seasonal temperatures, prices decline. Natural gas prices decreased in most market locations nationwide over the report week, as temperatures remained slightly above average across most of the country, limiting the demand for excess cooling or heating. The Henry Hub spot price began the report week at $2.68/MMBtu last Wednesday and settled yesterday at $2.59/MMBtu. Prices at other locations also declined, most by less than 5%. In the West, prices at PG&E Citygate, serving Northern California, started the report period at $3.14/MMBtu last Wednesday, then dropped to $3.07/MMBtu yesterday. Prices at the Chicago Citygate declined by 5¢ over the report week, closing at $2.65/MMBtu yesterday. Other price points saw similar declines.

Northeast prices varied through the report week. In the Northeast, prices in New England saw some upward pressure due to compressor maintenance outages, which started Thursday and ended Tuesday, at Cromwell, Connecticut on the Algonquin Gas Transmission pipeline. Warmer-than-normal temperatures during the first few days of the report week may also have influenced pricing. Algonquin Citygate, which serves Boston, began the week Wednesday at $2.57/MMBtu, rose to $4.77/MMBtu on Thursday, then dropped to $3.13/MMBtu Monday as flows improved, closing the week at $2.00/MMBtu yesterday. Similarly, at the Tennessee Zone 6 200 line, serving lower New England, prices began the report week last Wednesday at $2.60/MMBtu, rose to $4.42/MMBtu on Thursday, and dropped through the remainder of the period to close down at $2.02/MMBtu yesterday. At Transcontinental Pipeline's Zone 6 trading point for New York City delivery, the spot price fluctuated during the report week, starting at $2.66 this past Wednesday dipping to $1.60 on Friday, then increasing to close at $2.31/MMBtu yesterday.

Marcellus prices remain low. Most Marcellus-area prices decreased during the report week. At Tennessee's Zone 4 Marcellus location, prices started the week at $1.24/MMBtu last Wednesday then dropped to $1.08/MMBtu yesterday. On the Transco Leidy Line, prices decreased from $1.28/MMBtu last Wednesday to $1.10/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased by 8¢, falling from $1.36/MMBtu to $1.28/MMBtu.

The Ohio Pipeline Energy Network (OPEN) project entered partial service on September 18. Flows increased from OPEN's Tompkinsville compressor station to 1.1 Bcf/d on September 18, a 0.4 Bcf/d increase from its 30-day average, indicating that the OPEN project is ramping up to support takeaway from the Marcellus and Utica plays, according to Bentek Energy data.

Nymex prices decrease slightly. At the Nymex, the October contract began the week at $2.660/MMBtu and ended the report week down slightly, at $2.569/MMBtu yesterday. The October 2015 price is more than $1.24 below the October 2014 price of $3.816/MMBtu from this time last year. The 12-month strip, which averages the October 2015 through September 2016 Nymex prices, closed at $2.793/MMBtu yesterday, down slightly from the week-ago strip price of $2.871/MMBtu.

Supply increases slightly. Dry natural gas production increased by 0.2% this week, averaging 72.1 Bcf/d, 3.9% higher than the level for this week in 2014. Contributing to this increase, Northeast production set a new high at 20.57 Bcf/d, according to Bentek Energy data. Imports of natural gas from Canada rose by 1.3% week over week. Overall, supply increased slightly, by 0.1%.

Consumption decreases. U.S. consumption decreased by 0.1%, compared to the last report week, with total natural gas used for power generation (power burn) flat. Regional power burn increases in the Midwest (18%), Southeast (4%), Texas (8%), and Mid-Continent (42%) were offset by declines in the rest of the country. Consumption in the residential/commercial sectors increased by 0.6%, while industrial sector consumption decreased by 1%. Exports to Mexico averaged 3.0 Bcf/d, a 0.1% decrease from the previous week, though 39.8% higher than exports for the same week last year.

more price data

Storage

Net storage injection larger than five-year average and year-ago. The net injection reported for the storage report week ending September 18 was 106 Bcf, up from 73 Bcf the previous week. This injection compares with the five-year (2010-14) average increase of 83 Bcf for the week and last year's increase of 96 Bcf. Working gas inventories for the report week totaled 3,440 Bcf, 466 Bcf (16%) higher than last year at this time and 148 Bcf (4%) higher than the five-year average.

Storage injections are higher than expectations. Market expectations, on average, called for a build of 97 Bcf for the week. When the EIA storage report was released at 10:30 a.m. on September 24, the October Nymex price fell by about 2ȼ, from $2.55 to $2.53/MMBtu, and stayed at that level in the following hour.

From April 3 (the beginning of the injection season) through September 18, net storage injections totaled 1,979 Bcf, or 162 Bcf lower than the 2,141 Bcf injected during the same 24 weeks in 2014. During these weeks for the years 2010-14, net injections into storage averaged 1,641 Bcf. The estimated average unit value of the natural gas put into storage from April 3 to September 11 this year is $2.76/MMBtu, 36% lower than the average value of $3.99/MMBtu for the same 24 weeks last year. The highest winter-month Nymex price (for the January 2016 contract) in trading for the week ending September 18 averaged $2.98/MMBtu. This price is 34¢/MMBtu more than the October Nymex contract price. A year ago, the difference was also 34¢/MMBtu.

Temperatures during the storage report week are warmer than normal. Temperatures in the Lower 48 states averaged 69° for the storage report week, 1o warmer than the 30-year normal temperature and 3° warmer than the average temperature during the same week last year. There were 39 population-weighted cooling degree days (CDD) this report week, 2 CDD less than the five-year average and 1 CDD less than this week last year.

more storage data

See also:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
24-Sep
Fri,
25-Sep
Mon,
28-Sep
Tue,
29-Sep
Wed,
30-Sep
Henry Hub
2.56
2.54
2.63
2.53
2.47
New York
2.20
1.53
2.06
2.01
2.44
Chicago
2.61
2.59
2.66
2.63
2.56
Cal. Comp. Avg,*
2.80
2.75
2.83
2.74
2.66
Futures ($/MMBtu)
October Contract
2.591
2.564
2.563
Expired
Expired
November Contract
2.674
2.631
2.670
2.586
2.524
December Contract
2.841
2.802
2.837
2.763
2.701
*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: (9/23/15 - 9/30/15)
Percent change for week compared with:
 
last year
last week
Gross production
4.51%
0.43%
Dry production
4.47%
0.43%
Canadian imports
-5.61%
-4.73%
      West (net)
2.94%
-0.10%
      Midwest (net)
-10.59%
-2.20%
      Northeast (net)
54.96%
161.87%
LNG imports
N/A
N/A
Total supply
3.78%
-0.03%
Source: BENTEK Energy LLC
U.S. consumption - Gas Week: (9/23/15 - 9/30/15)
Percent change for week compared with:
 
last year
last week
U.S. consumption
4.0%
-1.3%
Power
13.7%
-3.3%
Industrial
-2.8%
0.4%
Residential/commercial
-3.3%
0.7%
Total demand
5.5%
-1.2%
Source: BENTEK Energy LLC
Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Fri, September 25, 2015
Change from
 
last week
last year
Oil rigs
640
-0.62%
-59.80%
Natural gas rigs
197
-0.51%
-41.72%
Miscellaneous
1
0.00%
0.00%
Rig numbers by type
Fri, September 25, 2015
Change from
 
last week
last year
Vertical
123
3.36%
-67.02%
Horizontal
629
-1.72%
-53.30%
Directional
86
3.61%
-59.24%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (bcf)
Region
2015-09-25
2015-09-18
change
East
1,804
1,742
62
West
502
496
6
Producing
1,232
1,202
30
Total
3,538
3,440
98
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(9/25/14)
5-year average
(2010-2014)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,704
5.9
1,829
-1.4
West
452
11.1
488
2.9
Producing
928
32.8
1,068
15.4
Total
3,084
14.7
3,386
4.5
Source: U.S. Energy Information Administration


Temperature -- heating & cooling degree days (week ending Sep 24)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
23
-20
-32
11
10
11
Middle Atlantic
13
-19
-21
11
3
8
E N Central
22
-14
-19
8
-1
6
W N Central
22
-17
-7
22
9
9
South Atlantic
2
-9
-10
60
6
10
E S Central
3
-8
-7
48
8
6
W S Central
1
-2
-1
94
23
14
Mountain
19
-24
15
42
9
-11
Pacific
5
-9
4
55
29
14
United States
13
-13
-9
41
11
9
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Sep 24, 2015

Mean Temperature (F) 7-Day Mean ending Sep 24, 2015

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Sep 24, 2015

Mean Temperature Anomaly (F) 7-Day Mean ending Sep 24, 2015

Source: NOAA/National Weather Service