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Natural Gas Weekly Update

for week ending May 1, 2019   |  Release date:  May 2, 2019   |  Next release:  May 9, 2019   |   Previous weeks


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

In the News:

Natural gas pipeline projects would expand capacity into New York City

Consolidated Edison Company of New York, Inc. (Con Edison)—the largest utility provider in the New York City area, serving 10 million customers—is looking to expand natural gas pipeline capacity into its service territory. Last week, Con Edison announced it had reached an agreement with Kinder Morgan’s Tennessee Gas Pipeline to bring additional capacity into Westchester County, just north of New York City, by November 2023. Once in service, this expansion could lift the moratorium on new natural gas customer hookups that Con Edison announced in January, which took effect on March 15. According to Con Edison, the incremental capacity increase from Tennessee Gas will bring an additional 110 million cubic feet per day (MMcf/d) of natural gas into the area.

The last capacity expansion to enter service in the New York City area was in 2013 when Texas Eastern’s (TETCO) NY-NJ Project added 800 million cubic feet per day (MMcf/d) of deliverability. According to Con Edison, the utility company has been providing more than 1,700 new natural gas connections per year since then for residential and commercial developments, for oil-to-gas conversions, and for new commercial applications. For the past two years, scheduled pipeline capacity for New York City and Westchester County has been oversubscribed by an average of 20% according to data from Genscape. During peak heating demand (December–March), consumption has averaged 1.3 billion cubic feet per day (Bcf/d) and 1.4 Bcf/d in 2018 and 2019, respectively.

The New York state Department of Environmental Conservation is considering the proposed Transcontinental Gas Pipe Line Co. LLC (Transco) Northeast Supply Enhancement project, which would expand natural gas pipeline capacity by an estimated 400 MMcf/d in Pennsylvania, New Jersey, and New York. The proposed expansion would increase deliveries to National Grid, the largest distributor of natural gas in the Northeast. The Transco pipeline is a 10,000-mile pipeline that brings natural gas from South Texas to New York City, and it has a current capacity of 1,696 MMcf/d.

Overview:

(For the week ending Wednesday, May 1, 2019)

  • Natural gas spot prices rose at most locations this report week (Wednesday, April 24 to Wednesday, May 1). Henry Hub spot prices rose from $2.50 per million British thermal units (MMBtu) last Wednesday to $2.62/MMBtu yesterday.
  • At the Nymex, the May 2019 contract expired Friday at $2.566/MMBtu, up 10¢/MMBtu from last Wednesday. The June 2019 contract increased to $2.620/MMBtu, up 12¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging June 2019 through May 2020 futures contracts climbed 8¢/MMBtu to $2.747/MMBtu.
  • Net injections to working gas totaled 123 billion cubic feet (Bcf) for the week ending April 26. Working natural gas stocks are 1,462 Bcf, which is 10% more than the year-ago level and 18% lower than the five-year (2014–18) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 1¢/MMBtu, averaging $6.11/MMBtu for the week ending May 1. The price of isobutane, natural gasoline, and butane fell by 1%, 2%, and 3% respectively. The price of propane rose by 2%. The price of ethane remained flat week over week.
  • According to Baker Hughes, for the week ending Tuesday, April 23, the natural gas rig count decreased by 1 to 186. The number of oil-directed rigs fell by 20 to 805. The total rig count decreased by 21, and it now stands at 991.

more summary data

Prices/Supply/Demand:

Prices rise across the country. This report week (Wednesday, April 24 to Wednesday, May 1), Henry Hub spot prices rose 12¢ from $2.50/MMBtu last Wednesday to a weekly high of $2.62/MMBtu yesterday. At the Chicago Citygate, prices increased 26¢ from $2.24/MMBtu last Wednesday to $2.50/MMBtu yesterday. Spring temperatures across the country were mixed, with cooler-than-normal temperatures across the northern Midwest and Northeast part of the country and warmer-than-normal temperatures in California and the Southwest.

California prices rise. Prices across California rose with warm temperatures and increased cooling degree days. Prices at PG&E Citygate in Northern California rose 44¢, up from $2.97/MMBtu last Wednesday to a weekly high of $3.41/MMBtu yesterday. Prices at SoCal Citygate increased 2¢ from $2.44/MMBtu last Wednesday to $2.46/MMBtu yesterday.

Northeast prices rise. Prices in the Northeast rose with cool temperatures and continued demand for space heating. At the Algonquin Citygate, which serves Boston-area consumers, prices went up 17¢ from $2.43/MMBtu last Wednesday to $2.60/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, prices increased 7¢ from $2.28/MMBtu last Wednesday to $2.35/MMBtu yesterday.

Tennessee Zone 4 Marcellus spot prices increased 19¢ from $1.92/MMBtu last Wednesday to $2.11/MMBtu yesterday. Prices at Dominion South in southwest Pennsylvania rose 7¢ from $2.13/MMBtu last Wednesday to $2.20/MMBtu yesterday.

Waha discount to Henry Hub widens again. The discount to the Henry Hub widened during the report week with ongoing outages on the El Paso Natural Gas pipeline at the San Juan crossover point in Northwestern New Mexico. Kinder Morgan issued an update to the force majeure on April 30, anticipating reduced throughput capacity by 56 MMcf/d while they perform mechanical repairs at three compressor stations. Prices at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $0.86/MMBtu last Wednesday, $1.64/MMBtu lower than Henry Hub prices. Yesterday, prices at the Waha Hub averaged $0.32/MMBtu, $2.30/MMBtu lower than Henry Hub prices. Waha Hub prices reached a weekly low of $0.06/MMBtu on Monday.

Supply falls. 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 remained constant week over week. Average net imports from Canada decreased by 4% from last week.

Demand rises driven by residential and commercial sectors. Total U.S. consumption of natural gas rose by 6% compared with the previous report week, according to data from PointLogic Energy. Natural gas consumed for power generation climbed by 7% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 13%. Natural gas exports to Mexico increased 15% after a dip in exports during the previous report week.

U.S. liquefied natural gas (LNG) exports flat week over week. Eight LNG vessels (five from Sabine Pass, one from Corpus Christi, and two from Cove Point) with a combined LNG-carrying capacity of 27.6 Bcf departed the United States from April 25 to May 1, according to shipping data compiled by Bloomberg. One vessel was loading at the Sabine Pass terminal on Wednesday.

According to Bloomberg, the Elba Island LNG facility in George expects to produce its first batch of LNG for testing this week. Trains 1-6 are in the commissioning phase and are expected to enter service in the second quarter of 2019.

Storage:

Net injections into storage totaled 123 Bcf for the week ending April 26, compared with the five-year (2014–18) average net injections of 70 Bcf and last year's net injections of 50 Bcf during the same week. Working gas stocks totaled 1,462 Bcf, which is 316 Bcf lower than the five-year average and 128 Bcf more than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change from working natural gas stocks ranged from net injections of 105 Bcf to 126 Bcf, with a median estimate of 117 Bcf.

More storage data and analysis can be found on the Natural Gas Storage Dashboard and the Weekly Natural Gas Storage Report.

See also:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
25-Apr
Fri,
26-Apr
Mon,
29-Apr
Tue,
30-Apr
Wed,
01-May
Henry Hub 2.47 2.54 2.57 2.60 2.62
New York 2.31 2.28 2.38 2.44 2.35
Chicago 2.21 2.35 2.40 2.41 2.50
Cal. Comp. Avg.* 2.51 2.08 2.54 2.60 2.66
Futures ($/MMBtu)
May Contract 2.514 2.566 Expired Expired Expired
June Contract 2.548 2.580 2.593 2.575 2.620
July Contract 2.602 2.630 2.640 2.617 2.658
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Sources: Natural Gas Intelligence and CME Group as compiled by Bloomberg, L.P.
Natural gas futures prices
Natural gas liquids spot prices


U.S. natural gas supply - Gas Week: (4/25/19 - 5/1/19)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
100.5
100.9
90.3
Dry production
89.6
90.0
79.7
Net Canada imports
4.7
4.9
5.9
LNG pipeline deliveries
0.1
0.1
0.1
Total supply
94.3
94.9
85.6

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (4/25/19 - 5/1/19)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
61.7
57.9
61.1
    Power
23.3
21.8
22.2
    Industrial
20.5
20.4
20.7
    Residential/commercial
17.8
15.7
18.2
Mexico exports
4.6
4.0
4.4
Pipeline fuel use/losses
6.0
5.9
5.5
LNG pipeline receipts
5.1
5.1
3.5
Total demand
77.4
73.0
74.5

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
Tue, April 23, 2019
Change from
 
last week
last year
Oil rigs
805
-2.4%
-2.4%
Natural gas rigs
186
-0.5%
-4.6%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, April 23, 2019
Change from
 
last week
last year
Vertical
47
-7.8%
-9.6%
Horizontal
873
-1.5%
-3.1%
Directional
71
-5.3%
4.4%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2019-04-26
2019-04-19
change
East
279
251
28
Midwest
290
264
26
Mountain
 75
 70
5
Pacific
152
138
14
South Central
666
616
50
Total
1,462
1,339
123
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report
Working gas in underground storage
Historical comparisons
Year ago
(4/26/18)
5-year average
(2014-2018)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
220
26.8
296
-5.7
Midwest
220
31.8
351
-17.4
Mountain
86
-12.8
119
-37.0
Pacific
186
-18.3
223
-31.8
South Central
623
6.9
788
-15.5
Total
1,334
9.6
1,778
-17.8
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report


Temperature – heating & cooling degree days (week ending Apr 25)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
59
-58
-75
0
0
0
Middle Atlantic
49
-51
-72
0
0
0
E N Central
84
-19
-35
0
0
0
W N Central
65
-27
-62
0
-1
0
South Atlantic
26
-19
-20
19
0
-2
E S Central
43
1
-14
3
-3
3
W S Central
21
5
-27
25
-1
16
Mountain
63
-37
-34
14
4
4
Pacific
29
-29
-6
5
1
4
United States
51
-25
-36
8
-1
3
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-day mean ending Apr 25, 2019

Mean Temperature (F) 7-Day Mean ending Apr 25, 2019

Source: National Oceanic and Atmospheric Administration

Deviation between average and normal (°F)

7-day mean ending Apr 25, 2019

Mean Temperature Anomaly (F) 7-Day Mean ending Apr 25, 2019

Source: National Oceanic and Atmospheric Administration