In the News:
U.S. natural gas exports experience significant year-over-year growth
U.S. exports of natural gas, including exports via pipeline and as liquefied natural gas (LNG), averaged 9.6 billion cubic feet per day (Bcf/d) in the first quarter of this year, according to EIA’s most recent Natural Gas Monthly report. This level of exports is 0.7 Bcf/d (8%) more than in the first quarter of 2017, and 3.8 Bcf/d (66%) more than in the first quarter of 2016.
The United States was a net exporter of natural gas in the first quarter of 2018, with net exports averaging 0.6 Bcf/d. In 2017 as a whole, the United States was a net exporter of natural gas for the first time since 1957. Both LNG exports and pipeline exports have contributed to this shift in natural gas exports.
Since the beginning of 2016, four trains at the Sabine Pass liquefaction terminal in Louisiana have come online (total peak nameplate liquefaction capacity of 2.8 Bcf/d) as has the Cove Point liquefaction terminal in Maryland (0.8 Bcf/d peak nameplate capacity). The amount of U.S. natural gas exported as LNG averaged 2.6 Bcf/d equivalent in the first quarter of 2018, 1.0 Bcf/d (62%) more than in the same period last year. EIA expects the United States to have a total liquefaction capacity of 9.6 Bcf/d by the end of 2020.
U.S. exports to Mexico via pipeline have also been increasing as more infrastructure has been built to transport natural gas both to and within Mexico. Mexico pipeline exports averaged 4.3 Bcf/d in the first three months of 2018, compared to 4.1 Bcf/d in the first three months of 2017, and 3.3 Bcf/d in the first three months of 2016. Exports to Mexico are expected to continue to increase as more natural gas-fired power plants come online in Mexico.
U.S. net natural gas pipeline imports from Canada decreased from 2016 to 2017, in part because of the increasing U.S. exports to Canada, particularly from the U.S. Northeast. This decrease in net imports is expected to continue as the Rover and NEXUS pipelines begin to deliver additional supplies of low-cost natural gas from the Appalachia basin to the markets in the U.S. Midwest and eastern Canada.
EIA projects U.S. natural gas exports will continue growing through 2050 in its Annual Energy Outlook 2018 Reference case, as well as across most side cases.
Overview:
(For the Week Ending Wednesday, June 6, 2018)
- Natural gas spot price movement varied this report week (Wednesday, May 30 to Wednesday, June 6). The Henry Hub spot price rose from $2.83 per million British thermal units (MMBtu) last Wednesday to $2.85/MMBtu yesterday.
- At the New York Mercantile Exchange (Nymex), the July 2018 contract price rose 1¢ from $2.885/MMBtu last Wednesday to $2.896/MMBtu yesterday.
- Net injections to working gas totaled 92 billion cubic feet (Bcf) for the week ending June 1. Working natural gas stocks are 1,817 Bcf, which is 31% lower than the year-ago level and 22% lower than the five-year (2013–17) average for this week.
- The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by $0.23, averaging $8.83/MMBtu for the week ending June 6. The spot prices of natural gasoline, propane, butane, and isobutane fell by 4%, 3%, 1%, and 12%, respectively. The spot price of ethane rose by 8%.
- According to Baker Hughes, for the week ending Tuesday, May 29, the natural gas rig count decreased by 1 to 197. The number of oil-directed rigs rose by 2 to 861. The total rig count increased by 1, and it now stands at 1060.
Prices/Supply/Demand:
Spot price trends are mixed this report week. From Wednesday, May 30 to Wednesday, June 6, the Henry Hub spot price rose 2¢ from $2.83/MMBtu last Wednesday to $2.85/MMBtu yesterday. Weather trended cooler toward the end of the report week, reducing power burn but increasing demand in the residential and commercial sectors. At the Chicago Citygate, prices increased 1¢ from last Wednesday to $2.67/MMBtu yesterday.
Prices at PG&E Citygate in Northern California fell 8¢, down from $3.03/MMBtu last Wednesday to $2.95/MMBtu yesterday. The price at SoCal Citygate decreased 34¢ from $3.16/MMBtu last Wednesday to $2.82/MMBtu yesterday. Prices at SoCal Citygate remain volatile amid ongoing supply constraints.
The difference between prices in the Marcellus basin and prices at northeast demand centers narrows. At the Algonquin Citygate, which serves Boston-area consumers, prices went down 3¢ from $2.54/MMBtu last Wednesday to $2.51/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, prices decreased 5¢ from $2.72/MMBtu last Wednesday to $2.67/MMBtu yesterday.
Several Marcellus region prices, by contrast, rose sharply. Tennessee Zone 4 Marcellus spot prices increased by $1.02 to $2.09/MMBtu yesterday, and the price for the Transco-Leidy Line saw a similar movement. Prices at Dominion South in northwest Pennsylvania fell 4¢ from $2.40/MMBtu last Wednesday to $2.36/MMBtu yesterday. Discounted prices in the region were eased by additional takeaway capacity placed into service on both Rover Mainline B on May 31 and on Transco as additional portions of the Atlantic Sunrise Project came online June 1.
July contract increases slightly. At the Nymex, the price of the July 2018 contract increased 1¢, from $2.885/MMBtu last Wednesday to $2.896/MMBtu yesterday. The price of the 12-month strip averaging July 2018 through June 2019 futures contracts climbed 1¢ to $2.891/MMBtu.
Supply falls slightly. According to data from PointLogic Energy, the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production decreased by 1% compared with the previous report week. Average net imports from Canada decreased by 11% from last week as Rover began deliveries into the Vector pipeline, driving an increase in U.S. exports into Canada over the report week.
Demand ticks up. Total U.S. consumption of natural gas rose by 2% compared with the previous report week, according to data from PointLogic Energy. Natural gas consumed for power generation declined by 1% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 19%, driven by cool temperatures in New England late this report week. Natural gas exports to Mexico decreased 1%.
U.S. LNG exports increase week over week. Six LNG vessels (combined LNG-carrying capacity 21.8 Bcf) departed the United States from May 31 through June 6—four tankers from Sabine Pass liquefaction terminal (combined LNG-carrying capacity 14.9 Bcf) and two tankers from Cove Point terminal (combined LNG-carrying capacity 6.9 Bcf). One tanker (LNG-carrying capacity 3.8 Bcf) was loading at the Sabine Pass terminal on Wednesday.
Storage:
Net injections fall to lower than the five-year average. Net injections into storage totaled 92 Bcf for the week ending June 1, lower than both the five-year (2013–17) average net injections of 104 Bcf and last year's net injections of 103 Bcf during the same week. Net injections averaged 13.7 Bcf/d; net injections will have to average 12.6 Bcf/d for the remainder of the refill season to match the five-year average level (3,815 Bcf) by October 31. Working gas stocks totaled 1,817 Bcf, which is 512 Bcf lower than the five-year average and 799 Bcf lower than last year at this time.
Despite low storage inventories, the average January 2019 futures contract price trades at a lower premium to the average spot price than last year at this time. During the most recent storage week, the average natural gas spot price at the Henry Hub averaged $2.86/MMBtu, and the Nymex futures price of natural gas for delivery in January 2019 averaged $3.15/MMBtu, 29¢/MMBtu higher than the spot price. A year ago, the January contract was 45¢/MMBtu higher than the spot price.
Reported net injections into storage are within the range of analysts’ expections. According to The Desk survey of natural gas analysts, estimates of the weekly net change from working natural gas storage ranged from net injections of 85 Bcf to 98 Bcf, with a median estimate of 93 Bcf. At the 10:30 a.m. release of the Weekly Natural Gas Storage Report (WNGSR), the price of the Nymex futures contract for July delivery at the Henry Hub increased 1¢/MMBtu to $2.97/MMBtu, with 53 trades executed. Prices vaired in subsequent trading, falling to $2.95 /MMBtu.
Temperatures are in the normal range for the storage week. Temperatures in the Lower 48 states averaged 73 degrees Fahrenheit (°F), 7°F higher than the normal and 7°F higher than last year at this time. Temperatures were 7°F higher than the level reported for the previous week.
See also:
| Spot Prices ($/MMBtu) | Thu, 31-May |
Fri, 01-Jun |
Mon, 04-Jun |
Tue, 05-Jun |
Wed, 06-Jun |
|---|---|---|---|---|---|
| Henry Hub |
2.89 |
2.90 |
2.91 |
2.87 |
2.85 |
| New York |
2.97 |
2.47 |
2.80 |
2.63 |
2.67 |
| Chicago |
2.74 |
2.70 |
2.73 |
2.67 |
2.67 |
| Cal. Comp. Avg.* |
2.56 |
2.65 |
2.72 |
2.64 |
2.62 |
| Futures ($/MMBtu) | |||||
| July contract | 2.952 |
2.962 |
2.930 |
2.890 |
2.896 |
| August contract |
2.965 |
2.976 |
2.943 |
2.907 |
2.909 |
| *Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg. | |||||
| Source: NGI's Daily Gas Price Index | |||||
| U.S. natural gas supply - Gas Week: (5/31/18 - 6/6/18) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| Marketed production | 89.7 |
90.5 |
82.0 |
| Dry production | 79.5 |
80.1 |
72.5 |
| Net Canada imports | 5.7 |
6.4 |
5.6 |
| LNG pipeline deliveries | 0.1 |
0.1 |
0.1 |
| Total supply | 85.3 |
86.6 |
78.1 |
|
Source: OPIS PointLogic Energy, an IHS Company | |||
| U.S. natural gas consumption - Gas Week: (5/31/18 - 6/6/18) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| U.S. consumption | 57.8 |
56.6 |
54.0 |
| Power | 29.5 |
29.9 |
26.1 |
| Industrial | 19.7 |
19.6 |
19.8 |
| Residential/commercial | 8.5 |
7.1 |
8.2 |
| Mexico exports | 4.4 |
4.4 |
4.0 |
| Pipeline fuel use/losses | 6.4 |
6.4 |
6.0 |
| LNG pipeline receipts | 2.7 |
2.8 |
2.2 |
| Total demand | 71.3 |
70.2 |
66.1 |
|
Source: OPIS PointLogic Energy, an IHS Company | |||
| Rigs | |||
|---|---|---|---|
Tue, May 29, 2018 |
Change from |
||
last week |
last year |
||
| Oil rigs | 861 |
0.2% |
17.5% |
| Natural gas rigs | 197 |
-0.5% |
8.2% |
| Note: Excludes any miscellaneous rigs | |||
| Rig numbers by type | |||
|---|---|---|---|
Tue, May 29, 2018 |
Change from |
||
last week |
last year |
||
| Vertical | 66 |
0.0% |
-14.3% |
| Horizontal | 929 |
0.3% |
20.5% |
| Directional | 65 |
-3.0% |
-4.4% |
| Source: Baker Hughes Inc. | |||
| Working gas in underground storage | ||||
|---|---|---|---|---|
Stocks billion cubic feet (Bcf) |
||||
| Region | 2018-06-01 |
2018-05-25 |
change |
|
| East | 351 |
328 |
23 |
|
| Midwest | 341 |
315 |
26 |
|
| Mountain | 121 |
113 |
8 |
|
| Pacific | 231 |
221 |
10 |
|
| South Central | 773 |
748 |
25 |
|
| Total | 1,817 |
1,725 |
92 |
|
| Source: U.S. Energy Information Administration | ||||
| Working gas in underground storage | |||||
|---|---|---|---|---|---|
Historical comparisons |
|||||
Year ago (6/1/17) |
5-year average (2013-2017) |
||||
| Region | Stocks (Bcf) |
% change |
Stocks (Bcf) |
% change |
|
| East | 452 |
-22.3 |
460 |
-23.7 |
|
| Midwest | 610 |
-44.1 |
505 |
-32.5 |
|
| Mountain | 171 |
-29.2 |
145 |
-16.6 |
|
| Pacific | 267 |
-13.5 |
279 |
-17.2 |
|
| South Central | 1,116 |
-30.7 |
940 |
-17.8 |
|
| Total | 2,616 |
-30.5 |
2,329 |
-22.0 |
|
| Source: U.S. Energy Information Administration | |||||
| Temperature – heating & cooling degree days (week ending May 31) | ||||||||
|---|---|---|---|---|---|---|---|---|
HDD deviation from: |
CDD deviation from: |
|||||||
| Region | HDD Current |
normal |
last year |
CDD Current |
normal |
last year |
||
| New England | 17 |
-19 |
-42 |
15 |
11 |
15 |
||
| Middle Atlantic | 2 |
-25 |
-26 |
35 |
24 |
35 |
||
| E N Central | 0 |
-32 |
-24 |
79 |
60 |
73 |
||
| W N Central | 0 |
-28 |
-30 |
81 |
56 |
68 |
||
| South Atlantic | 0 |
-9 |
-4 |
77 |
23 |
17 |
||
| E S Central | 0 |
-9 |
-6 |
80 |
35 |
34 |
||
| W S Central | 0 |
-1 |
-1 |
116 |
42 |
34 |
||
| Mountain | 11 |
-30 |
-24 |
39 |
7 |
3 |
||
| Pacific | 27 |
-1 |
14 |
5 |
-7 |
1 |
||
| United States | 7 |
-18 |
-14 |
60 |
28 |
32 |
||
|
Note: HDD = heating degree day; CDD = cooling degree day Source: National Oceanic and Atmospheric Administration | ||||||||
Average temperature (°F)
7-Day Mean ending May 31, 2018
Source: NOAA National Weather Service
Deviation between average and normal (°F)
7-Day Mean ending May 31, 2018
Source: NOAA National Weather Service
