Natural Gas

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Natural Gas Weekly Update

for week ending April 12, 2017   |  Release date:  April 13, 2017   |  Next release:  April 20, 2017   |   Previous weeks


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

In the News:

Natural gas stocks end heating season at the third highest level in 10 years

Working natural gas in storage as of March 31, the traditional end of the heating season, totaled 2,051 billion cubic feet (Bcf), according to EIA's Weekly Natural Gas Storage Report data released on April 6. Although this total is 265 Bcf (15%) higher than the five-year (2012-16) end-of-season average, stocks were 427 Bcf (17%) lower than last year's record end-of-season high. Net withdrawals over the heating season (starting November 1, 2016) were 78 Bcf less than the five-year average and 485 Bcf more than withdrawals last year.

A year ago, inventories were the highest on record for the end of the heating season and totaled 2,478 Bcf, 54% higher than the five-year average (2011-15) for that season. For most of 2016 and continuing into the heating season, inventories remained above the five-year average. Inventories hit a new record level of 4,017 Bcf on November 4, only to be bested the following week by the current all-time record level of 4,047 Bcf.

Although the past two withdrawal seasons were unseasonably warm, the total 2016–17 heating season drawdown came much closer to the five-year average than the 2015–16 drawdown, despite the first ever recorded February net injection of 7 Bcf for the week ending February 24. While total demand levels in the 2016–17 heating season were similar to the previous withdrawal season, dry gas production was down by 3%. Residential/commercial and industrial sector consumption levels were similar to last year, which reflects the warmer-than-normal temperatures in both periods; however, consumption by electric generators decreased 2.1 Bcf (8%) and was offset by a 2.0 Bcf (61%) increase in exports from the United States. According to data from PointLogic, exports comprised an average of 6.1% of total demand in the 2016–17 heating season compared with 3.8% of total demand in 2015–16.

Overview:

(For the Week Ending Wednesday, April 12, 2017)

  • Natural gas spot prices fell at most locations this report week (Wednesday, April 5 to Wednesday, April 12). The Henry Hub spot price fell from $3.21 per million British thermal units (MMBtu) last Wednesday to $2.99/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the May 2017 contract price fell 8¢ from $3.266/MMBtu last Wednesday to $3.187/MMBtu yesterday.
  • Net injections to working gas totaled 10 Bcf for the week ending April 7. Working natural gas stocks are 2,061 Bcf, which is 17% lower than the year-ago level and 15% higher than the five-year (2012–16) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 31¢, averaging $6.36/MMBtu for the week ending April 12. The price of ethane, propane, butane, and isobutane all rose by 5%, 6%, 8%, and 7%, respectively. The price of natural gasoline remained flat week over week.
  • According to Baker Hughes, for the week ending Friday, April 7, the natural gas rig count increased by 5 to 165. The number of oil-directed rigs rose by 10 to 672. The total rig count increased by 15, and it now stands at 839.

more summary data

Prices/Supply/Demand:

Prices fall across the nation. Prices generally saw steady decreases over the week as weather forecasts turned warmer. These decreases were in many cases a reversal of temperature-related increases seen in the previous week. This report week (Wednesday, April 5 to Wednesday, April 12), the Henry Hub spot price fell 22¢ from $3.21/MMBtu last Wednesday to $2.99/MMBtu yesterday. EIA's recently released April Short-Term Energy Outlook forecasts that Henry Hub spot prices will average $3.04/MMBtu for the second quarter of 2017 (April, May, and June), and $3.10/MMBtu for 2017 as a whole. At the Chicago Citygate, prices decreased 28¢ from $3.24/MMBtu last Wednesday to $2.96/MMBtu yesterday. Prices at PG&E Citygate in Northern California fell 7¢, down from $3.39/MMBtu last Wednesday to $3.32/MMBtu yesterday. The price at SoCal Citygate decreased 7¢ from $3.32/MMBtu last Wednesday to $3.25/MMBtu yesterday.

Northeast prices decrease with warmer temperatures. At the Algonquin Citygate, which serves Boston-area consumers, prices fell 20¢ from $3.23/MMBtu last Wednesday to $3.03/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York, prices decreased 38¢ from $3.14/MMBtu last Wednesday to $2.76/MMBtu yesterday.

Tennessee Zone 4 Marcellus spot prices decreased 35¢ from $3.00/MMBtu last Wednesday to $2.65/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania fell 33¢ from $3.00/MMBtu last Wednesday to $2.67/MMBtu yesterday.

May Nymex price falls. At the Nymex, the price of the May 2017 contract decreased 8¢, from $3.266/MMBtu last Wednesday to $3.187/MMBtu yesterday. The price of the 12-month strip averaging May 2017 through April 2018 futures contracts declined 6¢ to $3.373/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 75.6 Bcf/d. Dry natural gas production grew by 1% compared with the previous report week, while net imports from Canada decreased by 4%.

Demand falls. Total U.S. consumption of natural gas fell by 7% compared with the previous report week, according to data from PointLogic. Decreasing natural gas use is typical for the "shoulder season" between winter's high heating demand and summer's large power burn. Power burn declined by 5% week over week, while industrial sector consumption decreased by 1%. Residential and commercial sector consumption declined by 15% because of the warmer weather. Natural gas exports to Mexico decreased 2% from last week, although there was an intraweek decrease of almost 1 Bcf/d from last Thursday to yesterday.

U.S. liquefied natural gas (LNG) exports. Natural gas pipeline deliveries to the Sabine Pass liquefaction terminal averaged 2.3 Bcf/d for the report week, 9% higher than in the previous week. Four vessels (combined LNG-carrying capacity of 14.3 Bcf) departed Sabine Pass last week (Thursday to Wednesday).

more price data

Storage:

Warmer temperatures during the first storage week of the injection season result in net injections into working gas storage. Net injections into storage totaled 10 Bcf, compared with the five-year (2012–16) average net injection of 12 Bcf and last year's net withdrawal of 1 Bcf during the same week. Working gas stocks totaled 2,061 Bcf, which is 263 Bcf more than the five-year average and 416 Bcf less than last year at this time.

The South Central region and the Pacific region post net injections for the second week in a row. Net injections in the South Central region and the Pacific region led to net injections in the Lower 48 states. Net injections of 5 Bcf in the Pacific region equaled its five-year average. Net injections into working gas in the South Central region totaled 11 Bcf, falling 2 Bcf below the five-year average. Salt facilities accounted for 6 Bcf of the net increase, 3 Bcf below its five-year average.

Lingering heating demand results in small withdrawals in the East and Midwest. Withdrawals in the East region and the Midwest region totaled 2 Bcf and 3 Bcf, respectively, matching their five-year averages. Withdrawals from storage in the Midwest were likely supported by the relatively higher share of aquifer storage facilities in that region, which often continue to withdraw gas from storage several weeks after temperatures begin to warm.

The January futures price continues to trade at a premium over the current spot price. During the most recent storage week, the average natural gas spot price at the Henry Hub was $3.15/MMBtu, while the Nymex futures price of natural gas for delivery in January 2018 averaged $3.65/MMBtu, a difference of 50¢. The premium was 96¢ a year ago.

Reported net injections are close to market expectations for the week. According to the Bloomberg survey of natural gas analysts, estimates of net injections to working natural gas storage ranged from 1 Bcf to 15 Bcf, with a median of 11 Bcf. Prices of the Nymex futures contract for May 2017 delivery at Henry Hub increased 2¢/MMBtu to $3.24/MMBtu in 781 trades four seconds after the release of the Weekly Natural Gas Storage Report (WNGSR). Prices declined in subsequent trading, reaching $3.22/MMBtu.

Temperatures remain higher than normal in the Lower 48 states on average. Temperatures in the Lower 48 states averaged 53°F, 4°F higher than the normal and 2°F higher than last year at this time. Temperatures were warmer than normal in most areas of the Lower 48 states outside of the New England and Mountain Census divisions. Temperatures in the New England Census division averaged 41°F, 1°F lower than the normal and the same as last year at this time, and temperatures in the Mountain Census division averaged 46°F, 1°F lower than the normal and 2°F lower than last year at this time.

more storage data

See also:

U.S. natural gas end-of-March working inventories, 2007-17


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
06-Apr
Fri,
07-Apr
Mon,
10-Apr
Tue,
11-Apr
Wed,
12-Apr
Henry Hub
3.23
3.20
3.15
3.08
2.99
New York
3.20
2.93
2.85
2.83
2.76
Chicago
3.12
3.07
3.03
2.94
2.96
Cal. Comp. Avg.*
3.06
3.02
3.03
2.99
3.00
Futures ($/MMBtu)
May Contract
3.331
3.261
3.238
3.150
3.187
June Contract
3.401
3.331
3.309
3.224
3.262
*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: (4/6/17 - 4/12/17)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
79.1
78.7
81.5
Dry production
70.2
69.8
72.6
Net Canada imports
5.4
5.6
5.8
LNG pipeline deliveries
0.0
0.0
0.3
Total supply
75.6
75.4
78.7

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: (4/6/17 - 4/12/17)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
58.2
62.4
69.2
    Power
21.7
22.9
23.0
    Industrial
20.7
20.9
21.3
    Residential/commercial
15.8
18.7
24.9
Mexico exports
3.8
3.9
3.4
Pipeline fuel use/losses
6.0
6.1
7.1
LNG pipeline receipts
2.3
2.1
0.6
Total demand
70.2
74.5
80.4

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, April 07, 2017
Change from
 
last week
last year
Oil rigs
672
1.5%
89.8%
Natural gas rigs
165
3.1%
85.4%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Fri, April 07, 2017
Change from
 
last week
last year
Vertical
73
5.8%
46.0%
Horizontal
695
1.5%
103.8%
Directional
71
1.4%
36.5%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2017-04-07
2017-03-31
change
East
266
268
-2
Midwest
476
479
-3
Mountain
141
142
-1
Pacific
221
216
5
South Central
957
946
11
Total
2,061
2,051
10
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(4/7/16)
5-year average
(2012-2016)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
421
-36.8
330
-19.4
Midwest
539
-11.7
369
29.0
Mountain
150
-6.0
122
15.6
Pacific
268
-17.5
234
-5.6
South Central
1,099
-12.9
744
28.6
Total
2,477
-16.8
1,798
14.6
Source: U.S. Energy Information Administration


Temperature – heating & cooling degree days (week ending Apr 06)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
168
6
3
0
0
0
Middle Atlantic
124
-21
-17
0
0
0
E N Central
126
-24
-30
0
0
0
W N Central
123
-21
-9
0
-1
0
South Atlantic
44
-33
-14
26
13
6
E S Central
42
-30
-17
6
1
4
W S Central
26
-12
-6
23
8
5
Mountain
132
0
13
2
-3
-3
Pacific
52
-25
2
0
-2
0
United States
92
-21
-12
8
4
2
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Apr 06, 2017

Mean Temperature (F) 7-Day Mean ending Apr 06, 2017

Source: NOAA National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Apr 06, 2017

Mean Temperature Anomaly (F) 7-Day Mean ending Apr 06, 2017

Source: NOAA National Weather Service