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Natural Gas Weekly Update

for week ending November 11, 2015   |  Release date:  November 12, 2015   |  Next release:  November 19, 2015   |   Previous weeks

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

In the News:

Working natural gas in storage breaks record

After a 49-Bcf net injection for the week, working natural gas in storage hit a weekly record of 3,978 billion cubic feet (Bcf) as of November 6, according to EIA's latest Weekly Natural Gas Storage Report. This level surpasses the weekly record of 3,929 Bcf set November 2, 2012, and then matched on October 30 of this year. Although the end of October marks the traditional end of the injection season, inventory increases commonly continue into the first weeks of November.

Inventory builds have been strong throughout the summer, with net injections surpassing the five-year (2010–14) average during most weeks. With an estimated net injection of 2,502 Bcf since the start of the refill season in April, the 2015 injection season has been the second-highest net build on recordbut falls short of last year's record build of 2,780 during the same time frame.

During 2015, marketed natural gas production remained several billion cubic feet per day (Bcf/d) above year-ago levels, and set a monthly record in August at 81.3 Bcf/d, 1.5 Bcf/d greater than the previous record. The electric power sector absorbed some of the growth in production, as low natural gas prices and high electricity demand, in response to warmer temperatures and increased air conditioning load, led to increased consumption of natural gas for power generation. Increases in natural gas generation also reflect structural changes in the power sector, as gas plants come online and coal-fired units retire.

However, even with high power-sector consumption, production substantially exceeded consumption, which led to higher-than-average storage injections. Relatively low natural gas prices have reflected this dynamic, yet have appeared to have little effect on production so far. Natural gas spot prices at the benchmark Henry Hub have remained below $3 per million British thermal unit (MMBtu) all year, and EIA's Short-Term Energy Outlook projects these spot prices will remain below $3/MMBtu through most of 2016.

EIA forecasts continued year-over-year growth in production, as well as lower-than-average overall heating requirements this winter, given forecasts for a warmer-than-normal winter. As a result of this and the current record storage levels, EIA forecasts that natural gas inventories will end March 2016 at about 1,862 Bcf, which would make it the second-highest storage level for March inventories since 2012.

On November 16, EIA's Weekly Natural Gas Storage Report will begin reporting storage levels for five regions, rather than the current three regions, to better align storage locations with the markets they serve. For additional background and historic data for the new regions, see the notice of changes.

Overview:

(For the Week Ending Wednesday, November 4, 2015)

  • Natural gas prices movements were mixed over the report week (Wednesday, November 4, through Wednesday, November 11), but prices remain relatively low. The Henry Hub spot price gained 9¢per million British thermal units (MMBtu) over the report week, starting the week last Wednesday, November 4, at $2.02/MMBtu, and increasing to $2.11/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the December 2015 contract remained flat, increasing from $2.262/MMBtu last Wednesday to $2.263/MMBtu yesterday.
  • Working natural gas in storage increased by 49 billion cubic feet (Bcf), rising to 3,978 Bcf as of Friday, November 6. The net injection into storage resulted in storage levels 10% above a year ago and 5% above the five-year (2010-14) average for this week.
  • The total rig count fell by 4 units to 771 as of Friday, November 6, according to data provided by Baker Hughes Incorporated. This is 60% lower than year-ago levels. Oil rigs declined by 6 to 572 units and natural gas rigs rose by 2 to 199 units.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 4.8% to $5.09/MMBtu for the week ending Friday, November 6. With the exception of the price of ethane, which fell by 3.8% week over week, all the other prices increased. The prices of natural gasoline, propane, butane, and isobutane rose 3.3%, 7.2%, 9.6%, and 9.4%, respectively.

more summary data

Prices/Demand/Supply:

Natural gas spot prices increase at benchmark Henry Hub. Henry Hub spot prices increased 9¢ over the report week, but remain at relatively low levels, settling at $2.11/MMBtu yesterday. Prices posted in the Midwest declined with milder weather in the second half of the report week. At the Chicago Citygate, prices posted a decline from $2.19/MMBtu last Wednesday to $2.16/MMBtu yesterday, with prices peaking on Thursday at $2.24/MMBtu.

Western and Rockies prices unaffected by first winter storm of the season. With more than 10 inches of snow falling in parts of Nevada on Monday and several inches falling around the Denver metro area on Wednesday, natural gas prices in those areas remained relatively unresponsive. Natural Gas Intelligence's Rocky Mountain Regional Average price started the week at $2.04/MMBtu, gained 3¢ over the report week to close at $2.07 yesterday. Prices at the Kern delivery point in Nevada started the week at $2.23/MMBtu, and climbed to $2.31/MMBtu in trading Monday, and closed the week at $2.28/MMBtu.

Largest price declines occur in New England. In the Northeast market areas, prices posted large declines with milder temperatures. At the Algonquin Citygate, which serves Boston area consumers, prices declined from $3.95/MMBtu last Wednesday to $2.69/MMBtu yesterday. Prices peaked on Friday, November 6 at $4.49/MMBtu. In contrast, in New York, prices at Transcontinental Pipeline's Zone 6 remained below $2/MMBtu in all days of trading, starting the report week at $1.36/MMBtu last Wednesday and settling yesterday at $1.53/MMBtu.

Marcellus prices remain low. Prices at trading locations in the Marcellus Shale increased this week, but many settled at less than $1/MMBtu for most days over the report week. At Tennessee's Zone 4 Marcellus trading point, prices began the week at 76¢/MMBtu last Wednesday and ended the week at $1.00/MMBtu. On Transco's Leidy Line, prices increased from 87¢/MMBtu to $1.05/MMBtu from Wednesday to Wednesday.

Nymex prices flat. The December 2015 contract increased from $2.262/MMBtu last Wednesday to $2.263/MMBtu yesterday. The price of the 12-month strip (the 12 contracts between December 2015 and November 2016) increased slightly from $2.502/MMBtu last Wednesday to $2.536/MMBtu yesterday.

Supply is flat. Supply remained relatively flat this week, increasing by 0.3% week over week, according to data from Bentek Energy. A 0.5% drop in dry production was offset by imports of natural gas from Canada, which increased 12% over the report week. The largest increase occurred in imports to the Midwest, which rose by 47%, but were 19% lower than last year's levels for the report week. Liquefied natural gas imports continue to contribute only a small portion of U.S. supply.

Demand increases with seasonal weather. U.S. consumption rose 5% week over week, with increases across all sectors. Consumption of natural gas for electric power generation, currently the largest consuming sector, increased by 2% over the week. Residential and commercial consumption rose 13% week over week, with stronger demand in the later part of the week when temperatures were cooler.

more price data

Storage

Working gas stocks exceed highest recorded levels. Working gas climbed to exceed the record high of 3,929 Bcf reported for the week ending November 2, 2012, and last week ending October 30, 2015. Working gas stocks appear poised to establish an all-time record high in next week's storage report if working gas stocks increase during the coming week, as typically occurs in early November. This year's high injections have been driven by builds in the Producing region, particularly in the Producing salt region, which had never been higher than 332 Bcf before this year. Both the salt and nonsalt Producing regions have established new all-time highs, 373 Bcf and 1,010 Bcf, respectively. Working gas stocks in both the East and West regions remain off the pace established in 2012.

Net storage injection is lower than both the five-year average and last year's builds. The net injection reported for the week ending November 6 was 49 Bcf, 3 Bcf down from the 52 Bcf reported the previous week. This injection compares with the five-year (2010-14) average increase of 23 Bcf for the week and last year's increase of 47 Bcf. Working gas inventories for the report week were 373 Bcf (10%) higher than last year at this time and 173 Bcf (5%) higher than the five-year average.

Storage injections are larger than market expectations. Market expectations, on average, called for a build of 48 Bcf for this week. When the EIA storage report was released at 10:30 a.m. on November 13, the December Nymex price rose about 1cent, to $2.33/MMBtu, and rose slightly in the following hour to $2.37/MMBtu.

From April 3 (the beginning of the injection season) through November 6, net storage injections totaled 2,502 Bcf, or 278 Bcf lower than the 2,780 Bcf injected during the same 32 weeks in 2014. During these weeks for the years 2010-14, net injections into storage averaged 2,156 Bcf. The estimated average unit value of the natural gas put into storage from April 3 to November 6 this year is $2.68/MMBtu, 36% lower than the average value of $4.20/MMBtu for the same 32 weeks last year.

Temperatures during the storage report week are significantly warmer than normal. Temperatures in the Lower 48 states averaged 57° for the storage report week, 6° warmer than the 30-year normal temperature and 7° warmer than the average temperature during the same week last year. There were 68 population-weighted heating degree days (HDD) during this report week, 31 HDD fewer than the five-year average and 43 HDD fewer than during the same period last year. There were also 10 population-weighted cooling degree days (CDD) this report week, 6 CDD more than the five-year average and 7 CDD more than this week last year.

more storage data

See also:

Highest overall working storage levels


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
05-Nov
Fri,
06-Nov
Mon,
09-Nov
Tue,
10-Nov
Wed,
11-Nov
Henry Hub
2.09
2.16
2.13
2.11
2.11
New York
1.32
1.57
1.77
1.64
1.53
Chicago
2.24
2.17
2.17
2.18
2.16
Cal. Comp. Avg,*
2.40
2.31
2.41
2.37
2.42
Futures ($/MMBtu)
December contract
2.364
2.371
2.300
2.320
2.263
January contract
2.539
2.532
2.449
2.484
2.452
*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: (11/4/15 - 11/11/15)
Percent change for week compared with:
 
last year
last week
Gross production
0.83%
-0.47%
Dry production
0.83%
-0.47%
Canadian imports
-7.14%
12.18%
      West (net)
-6.79%
2.04%
      Midwest (net)
-18.45%
46.76%
      Northeast (net)
107.09%
-19.01%
LNG imports
211.74%
3.03%
Total supply
0.41%
0.31%
Source: BENTEK Energy LLC
U.S. consumption - Gas Week: (11/4/15 - 11/11/15)
Percent change for week compared with:
 
last year
last week
U.S. consumption
2.3%
4.9%
Power
30.8%
1.6%
Industrial
-3.8%
0.3%
Residential/commercial
-13.2%
13.2%
Total demand
3.4%
4.8%
Source: BENTEK Energy LLC
Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Fri, November 06, 2015
Change from
 
last week
last year
Oil rigs
572
-1.04%
-63.52%
Natural gas rigs
199
1.02%
-44.10%
Miscellaneous
0
0.00%
-100.00%
Rig numbers by type
Fri, November 06, 2015
Change from
 
last week
last year
Vertical
105
-6.25%
-70.83%
Horizontal
585
1.39%
-57.05%
Directional
81
-5.81%
-60.10%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (bcf)
Region
2015-11-06
2015-10-30
change
East
2,057
2,026
31
West
538
535
3
Producing
1,383
1,368
15
Total
3,978
3,929
49
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(11/6/14)
5-year average
(2010-2014)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,963
4.8
2,040
0.8
West
501
7.4
527
2.1
Producing
1,141
21.2
1,238
11.7
Total
3,605
10.3
3,805
4.5
Source: U.S. Energy Information Administration


Temperature -- heating & cooling degree days (week ending Nov 05)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
98
-37
-41
0
0
0
Middle Atlantic
84
-42
-43
0
0
0
E N Central
78
-62
-72
0
0
0
W N Central
86
-63
-60
0
0
0
South Atlantic
47
-32
-58
31
15
23
E S Central
39
-40
-78
9
6
9
W S Central
20
-24
-30
29
16
16
Mountain
109
-27
4
3
-1
-3
Pacific
53
-8
-2
3
1
2
United States
68
-39
-43
10
5
7
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Nov 05, 2015

Mean Temperature (F) 7-Day Mean ending Nov 05, 2015

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Nov 05, 2015

Mean Temperature Anomaly (F) 7-Day Mean ending Nov 05, 2015

Source: NOAA/National Weather Service