Natural Gas

‹ See the most recent Natural Gas Weekly Update

Natural Gas Weekly Update

for week ending November 9, 2016   |  Release date:  November 10, 2016   |  Next release:  November 17, 2016   |   Previous weeks

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

In the News:

Natural gas stocks end refill season at record high level

Working natural gas in storage in the Lower 48 states as of October 31, the traditional end of the refill season, reached a record level of 3,986 billion cubic feet (Bcf), as interpolated from EIA's Weekly Natural Gas Storage Report data released today. This is 183 Bcf (5%) higher than the five-year (2011–15) end-of-October average, and exceeds the previous end-of-October high of 3,929 set last in 2012. Net injections during this year's refill season, which started on April 1, 2016, were 678 Bcf (31%) lower than the five-year average and 955 Bcf (39%) lower than injections last year.

Working gas stocks entered the refill season this year at a record high level, totaling 2,470 Bcf on March 31, 19 Bcf above the previous 2012 record. Since the beginning of the refill season, net injections into working gas stocks have totaled 1,516 Bcf. This is the second-lowest refill season since 2007, with injections this year exceeding only the 2012 tally of 1,456 Bcf.

Natural gas production, consumption, and exports are considerably higher now compared with 2012. Despite these changes, the pace of injections to reach that level can vary considerably, depending in large part on where working gas stocks start the refill season. As in 2012, a high April 1 starting point and stronger-than-average power sector consumption contributed to lower-than-average weekly net injections. In the last two years, working gas stocks have ended the refill season within 200 Bcf of the previous five-year average. Additionally, over the last 13 years, weekly injections continued into November.

Overview:

(For the Week Ending Wednesday, November 2, 2016)

  • Natural gas spot prices were mixed this report week (Wednesday, November 2 to Wednesday, November 9). The Henry Hub spot price fell from $2.27 per million British thermal units (MMBtu) last Wednesday to $2.22/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the price of the December 2016 contract decreased 10¢, from $2.792/MMBtu last Wednesday to $2.690/MMBtu yesterday.
  • Net injections to working gas in storage totaled 54 Bcf for the week ending November 4. Working natural gas stocks levels are 4,017 Bcf, which is 1% greater than the year-ago level and 5% greater than the five-year (2011–15) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 35¢, closing at $5.85/MMBtu for the week ending November 4. The price of natural gasoline and isobutane fell by 7%, the price of propane and butane fell by 4%, and the price of ethane fell by 6%.
  • According to Baker Hughes, for the week ending Friday, November 4, the natural gas rig count increased by 3 to 117. The number of oil-directed rigs rose by 9 to 450. The total rig count climbed by 12, and it now stands at 569.

more summary data

Prices/Supply/Demand:

Price movements mixed. This report week (Wednesday, November 2 to Wednesday, November 9), the Henry Hub spot price fell 5¢ from $2.27/MMBtu last Wednesday to $2.22/MMBtu yesterday. Many other Wednesday-to-Wednesday decreases were of similar magnitude, and they mostly occurred in the middle of the country. At the Chicago Citygate, prices decreased 2¢ from $2.17/MMBtu last Wednesday to $2.15/MMBtu yesterday. Prices at PG&E Citygate in Northern California lost 4¢, down from $2.58/MMBtu last Wednesday to $2.54/MMBtu yesterday. A few points saw price rises; for example, the spot price at SoCal Citygate rose 16¢ from $2.19/MMBtu last Wednesday to $2.35/MMBtu yesterday.

Northeast prices rise with cooler weather forecast. At the Algonquin Citygate, which serves Boston-area consumers, prices went up 87¢ from $1.93/MMBtu last Wednesday to $2.80/MMBtu yesterday. Algonquin prices hit a low of $1.80/MMBtu on Monday, but then increased as weather forecasts began to predict cooler weather. At the Transcontinental Pipeline Zone 6 trading point for New York, prices increased 22¢ from $1.69/MMBtu last Wednesday to $1.91/MMBtu yesterday.

Tennessee Zone 4 Marcellus spot prices advanced 16¢ from $1.55/MMBtu last Wednesday to $1.71/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania rose 18¢ from $1.61/MMBtu last Wednesday to $1.79/MMBtu yesterday.

Future prices fall. At the Nymex, the price of the December 2016 contract decreased 10¢, from $2.792/MMBtu last Wednesday to $2.690/MMBtu yesterday. The price of the 12-month strip averaging December 2016 through November 2017 futures contracts declined 7¢ to $2.886/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 77.1 Bcf/d. Dry natural gas production grew by 1% compared with the previous report week, but this increase was offset by a 10% decrease in net imports from Canada.

Demand is up. Total U.S. consumption of natural gas rose by 3% compared with the previous report week, according to data from PointLogic. This increase was driven by a 22% increase in residential and commercial consumption as temperatures cooled. The temperature change also affected power burn, which declined by 7% week over week. Industrial sector consumption increased, rising 2% week over week. Natural gas exports to Mexico increased 2%.

U.S. liquefied natural gas (LNG) exports. The natural gas pipeline flows to Sabine Pass liquefaction terminal averaged 1.5 Bcf/d, 21% higher than flows last week. The terminal's operator, Cheniere Energy, received an approval from the Federal Energy Regulatory Commission to add feed gas and refrigerants to start the commissioning of Train 3. Train 3 is scheduled to come online in June 2017. One vessel (LNG-carrying capacity 3.2 Bcf) departed the terminal on November 3, and one vessel (LNG-carrying capacity 2.9 Bcf) departed the terminal on November 9.

Sempra Energy, the developer of the Cameron LNG liquefaction terminal in Hackberry, Louisiana, announced a six-month delay in the expected online date of the terminal's three trains. The delay was caused in part by heavy rain and flooding at the construction site. The first train is now expected to be online by mid-2018, the second train by the end of 2018, and the third train by mid-2019.

more price data

Storage:

Robust injections into storage push working gas to new record levels. Net injections into storage totaled 54 Bcf, compared with the five-year (2011–15) average net injection of 38 Bcf and last year's net injections of 55 Bcf during the same week. This marked the first time in 26 weeks that net injections into storage exceeded the five-year average. Unseasonably mild temperatures mitigated consumption of natural gas and contributed to considerably larger-than-average net injections. Working gas stocks total 4,017 Bcf–a new all-time high. Additionally, working gas stocks are 189 Bcf more than the five-year average and 47 Bcf more than last year at this time. Working gas in the Midwest, Mountain, and South Central salt regions exceeded their previous five-year highs of 1,122 Bcf, 230 Bcf, and 372 Bcf, respectively. The East region and the South Central nonsalt region are 9 Bcf and 6 Bcf below the five-year maximum for their respective regions. The Pacific region is 58 Bcf below its five-year maximum, in large part because of inventory restrictions on the Aliso Canyon facility.

South Central region draws closer to year-ago levels, robust injections continue at salt facilities. Net injections totaled 25 Bcf in the South Central region, with salt dome facilities accounting for net injections of 11 Bcf. Total net injections in the region topped the five-year average of 17 Bcf for the week. Since September 23, when net injections last fell below the five-year average at the salt dome facilities, net injections have totaled 110 Bcf, 57% above the five-year average. Working gas stocks in the South Central region are 9% higher than the five-year average for this time of year.

Net injections are in line with market expectations. Estimates of net injections into storage ranged from 46 Bcf to 62 Bcf, with a median of 52 Bcf. The price of the Nymex futures contract for December delivery at the Henry Hub fell 3¢/MMBtu to $2.59/MMBtu in 225 trades at the release of EIA's Weekly Natural Gas Storage Report (WNGSR). Prices continued to decline before recovering somewhat in subsequent trading, averaging $2.60/MMBtu within two minutes of the release.

Spread to the January futures price remains close to year-ago levels. During the most recent storage week, the average natural gas spot price at the Henry Hub was $2.52/MMBtu, while the Nymex futures price of natural gas for delivery in January 2017 averaged $3.09/MMBtu, a difference of 57¢. The premium was 47¢ a year ago.

Temperatures were lower than last week and remain higher than normal. Temperatures in the Lower 48 states averaged 59°F, 8°F higher than the normal and 3°F higher than last year at this time. Cooling degree days (CDD) in the Lower 48 states totaled 14, compared to 9 last year and compared to a normal of 6. Heating degree days (HDD) in the Lower 48 states totaled 54, compared with 70 last year and a normal of 102.

more storage data

See also:

Lower 48 end of refill season inventories


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
03-Nov
Fri,
04-Nov
Mon,
07-Nov
Tue,
08-Nov
Wed,
09-Nov
Henry Hub
2.36
2.19
2.33
2.32
2.22
New York
1.80
1.51
1.81
2.09
1.91
Chicago
2.28
2.12
2.26
2.26
2.15
Cal. Comp. Avg.*
2.24
2.11
2.32
2.29
2.23
Futures ($/MMBtu)
November contract
2.769
2.767
2.816
2.633
2.690
December contract
2.949
2.937
2.978
2.810
2.859
*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: (11/4/16 - 11/10/16)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
79.8
79.0
80.8
Dry production
71.7
71.0
72.9
Net Canada imports
5.2
5.8
5.5
LNG pipeline deliveries
0.2
0.2
0.2
Total supply
77.1
77.0
78.6

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: (11/4/16 - 11/10/16)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
61.5
59.4
66.8
    Power
22.6
24.3
25.3
    Industrial
20.7
20.2
20.7
    Residential/commercial
18.2
14.9
20.9
Mexico exports
3.4
3.3
3.0
Pipeline fuel use/losses
5.8
6.1
6.3
LNG pipeline receipts
1.5
1.3
0.0
Total demand
72.2
70.2
76.2

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, November 04, 2016
Change from
 
last week
last year
Oil rigs
450
2.0%
-21.3%
Natural gas rigs
117
2.6%
-41.2%
Miscellaneous
2
0.0%
0.0%
Rig numbers by type
Fri, November 04, 2016
Change from
 
last week
last year
Vertical
58
9.4%
-44.8%
Horizontal
459
2.0%
-21.5%
Directional
52
-3.7%
-35.8%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2016-11-04
2016-10-28
change
East
946
940
6
Midwest
1,148
1,130
18
Mountain
253
249
4
Pacific
327
326
1
South Central
1,343
1,318
25
Total
4,017
3,963
54
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(11/4/15)
5-year average
(2011-2015)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
925
2.3
928
1.9
Midwest
1,111
3.3
1,093
5.0
Mountain
217
16.6
210
20.5
Pacific
381
-14.2
368
-11.1
South Central
1,336
0.5
1,229
9.3
Total
3,970
1.2
3,828
4.9
Source: U.S. Energy Information Administration


Temperature -- heating & cooling degree days (week ending Nov 03)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
115
-17
18
0
0
0
Middle Atlantic
93
-29
6
0
0
0
E N Central
66
-69
-34
1
1
1
W N Central
62
-80
-46
5
5
5
South Atlantic
29
-46
-19
29
12
0
E S Central
10
-66
-35
22
19
17
W S Central
1
-40
-23
53
38
29
Mountain
67
-64
-30
13
9
8
Pacific
42
-16
13
0
-2
-4
United States
54
-48
-16
14
8
5
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Nov 10, 2016

Mean Temperature (F) 7-Day Mean ending Nov 10, 2016

Source: NOAA National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Nov 10, 2016

Mean Temperature Anomaly (F) 7-Day Mean ending Nov 10, 2016

Source: NOAA National Weather Service