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Natural Gas Weekly Update

for week ending February 19, 2020   |  Release date:  February 20, 2020   |  Next release:  February 27, 2020   |   Previous weeks


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

In the News:

European natural gas storage levels are higher than average

European natural gas storage levels are 48% higher than the five-year (2015–19) average for February, largely a result of unseasonably warm weather in recent months and higher-than-average imports in 2019. In January 2020, the average temperature in Europe was 0.36° Fahrenheit (F) higher than the previous record-high average, set in 2007, and 5.58°F higher than the 30-year average. Temperatures in north and northeast Europe, where demand for natural gas for space heating is highest, were approximately 10.8°F higher than the 30-year average in January 2020. As a result, demand for natural gas from storage was lower than normal, resulting in record-high January and February inventory levels. Working natural gas stocks at the start of February were at 71% of total storage capacity. The five-year average storage capacity utilization for the first day of February was 50%.

High natural gas stocks are partly the result of record-high deliveries to Europe of liquefied natural gas (LNG) in 2019. LNG exports to Europe from Australia, Russia, and the United States have been growing in recent years. Europe receives a large portion of U.S. LNG exports, with 10 European countries receiving some amount of U.S. LNG last year. From April through November 2019, 55% of U.S. LNG exports went to Europe, equal to 2,062 billion cubic feet (Bcf). In November 2019, the most recent month for which data is available, Europe received 58% of all U.S. LNG exports, and the United Kingdom alone received 40 Bcf of natural gas that month.

The capacity to deliver natural gas to Europe by pipeline has also expanded with new conduits, such as the Trans-Anatolian Pipeline from Azerbaijan. Additional sources of supply into the European market are moving ahead, which is further diversifying supply. In January 2020, a new pipeline called TurkStream entered service, delivering natural gas under the Black Sea directly to Turkey and Bulgaria. The Trans Adriatic Pipeline, which will connect supplies from Azerbaijan to southeast Europe, is currently undergoing commissioning and should be completed around the middle of 2020.

As a result of unseasonably low heating demand and growing supply, European natural gas prices are at relatively low levels. The spot price of natural gas at the UK benchmark National Balancing Point (NBP) averaged $3.66 per million British thermal unit (MMBtu) in January, an all-time low for the month. Similarly, the price of natural gas at the Title Transfer Facility (TTF) trading hub in the Netherlands averaged $3.62/MMBtu in January, also a record low for the month and less than half of the 2018 average price, which was $7.92/MMBtu.

Temperatures across Europe are forecast to remain higher-than-average through the end of the heating season.

Overview:

(For the week ending Wednesday, February 19, 2019)

  • Natural gas spot prices rose at most locations this report week (Wednesday, February 12 to Wednesday, February 19). The Henry Hub spot price rose from $1.87 per million British thermal units (MMBtu) last Wednesday to $2.02/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the price of the March 2020 contract increased 11¢, from $1.844/MMBtu last Wednesday to $1.955/MMBtu yesterday. The price of the 12-month strip averaging March 2020 through February 2021 futures contracts climbed 4¢/MMBtu to $2.213/MMBtu.
  • The net withdrawal from working gas totaled 151 billion cubic feet (Bcf) for the week ending February 14. Working natural gas stocks total 2,343 Bcf, which is 35% more than the year-ago level and 9% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 22¢/MMBtu, averaging $4.55/MMBtu for the week ending February 19. The prices of natural gasoline, isobutane, propane, ethane, and butane all rose, by 3%, 4%, 5%, 7%, and 7%, respectively.
  • According to Baker Hughes, for the week ending Tuesday, February 11, the natural gas rig count decreased by 1 to 110. The number of oil-directed rigs rose by 2 to 678. The total rig count stayed at 790.

more summary data

Prices/Supply/Demand:

Prices rise at most key trading hubs. This report week (Wednesday, February 12 to Wednesday, February 19), the Henry Hub spot price rose 15¢ from $1.87/MMBtu last Wednesday to a high of $2.02/MMBtu yesterday. The Lower 48 states generally experienced seasonal winter temperatures. At the Chicago Citygate, the price increased 7¢ from $1.83/MMBtu last Wednesday to a high of $1.90/MMBtu yesterday.

California prices rise. The price at PG&E Citygate in Northern California rose 1¢, up from $2.67/MMBtu last Wednesday to $2.68/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 5¢ from $2.34/MMBtu last Wednesday to $2.39/MMBtu yesterday.

Northeast prices rise with colder weather. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 28¢ from $2.50/MMBtu last Wednesday to $2.78/MMBtu yesterday after reaching a high of $3.75/MMtu on Thursday prior to cold weekend temperatures. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 51¢ from a low of $1.82/MMBtu last Wednesday to $2.33/MMBtu yesterday.

The Tennessee Zone 4 Marcellus spot price increased 21¢ from $1.59/MMBtu last Wednesday to $1.80/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose 17¢ from $1.62/MMBtu last Wednesday to $1.79/MMBtu yesterday.

Permian prices fall, widening the discount to the Henry Hub. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $0.80/MMBtu last Wednesday, $1.07/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a weekly low of $0.56/MMBtu, $1.46/MMBtu lower than the Henry Hub price.

Supply rises as net imports from Canada rise. According to data from IHS Markit, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production remained constant week over week. Average net imports from Canada increased by 7% from last week with higher imports into New England because of winter temperatures.

Demand rises, driven by demand for space heating. Total U.S. consumption of natural gas rose by 3% compared with the previous report week, according to data from IHS Markit. In the residential and commercial sectors, consumption increased by 7%. Natural gas consumed for power generation declined by 1% week over week. Industrial sector consumption increased by 1% week over week. Natural gas exports to Mexico increased 3% as deliveries into Mexico’s Sur de Texas-Tuxpan pipeline at the United States-Mexico border in Brownsville, Texas reached a new high of almost 1.0 Bcf/d according to Genscape.

U.S. LNG exports decrease week over week. Fourteen LNG vessels (seven from Sabine Pass, three from Corpus Christi, two from Freeport, and one each from Cameron and Cove Point) with a combined LNG-carrying capacity of 49 Bcf departed the United States between February 13 and February 19, according to shipping data compiled by Bloomberg.

Storage:

The net withdrawal from storage totaled 151 Bcf for the week ending February 14, compared with the five-year (2015–19) average net withdrawal of 136 Bcf and last year's net withdrawal of 163 Bcf during the same week. Working natural gas stocks totaled 2,343 Bcf, which is 200 Bcf more than the five-year average and 613 Bcf more than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from a net withdrawal of 128 Bcf to 158 Bcf, with a median estimate of 144 Bcf.

The average rate of withdrawal from storage is 11% lower than the five-year average so far in the withdrawal season (November through March). If the rate of withdrawal from storage matched the five-year average of 9.7 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,897 Bcf on March 31, which is 200 Bcf higher than the five-year average of 1,697 Bcf for that time of year.

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 ($/MMBtu)
Thu,
13-Feb
Fri,
14-Feb
Mon,
17-Feb
Tue,
18-Feb
Wed,
19-Feb
Henry Hub 1.89 1.86 Holiday 1.99 2.02
New York 2.44 1.87 Holiday 2.02 2.33
Chicago 1.80 1.73 Holiday 1.86 1.90
Cal. Comp. Avg.* 2.10 2.03 Holiday 2.16 2.14
Futures ($/MMBtu)
March Contract 1.826 1.837 Holiday 1.981 1.955
April Contract 1.856 1.856 Holiday 1.971 1.971
*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: (2/13/20 - 2/19/20)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
107.1
106.9
99.7
Dry production
94.7
94.5
88.8
Net Canada imports
5.5
5.1
4.6
LNG pipeline deliveries
0.2
0.1
0.3
Total supply
100.4
99.8
93.8

Source: IHS Markit
Note: LNG pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (2/13/20 - 2/19/20)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
99.7
96.4
98.9
    Power
29.0
29.2
27.6
    Industrial
24.6
24.2
25.7
    Residential/commercial
46.1
43.0
45.6
Mexico exports
5.4
5.3
4.9
Pipeline fuel use/losses
7.5
7.4
7.2
LNG pipeline receipts
8.0
8.6
4.6
Total demand
120.6
117.7
115.5

Source: IHS Markit
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, February 11, 2020
Change from
 
last week
last year
Oil rigs
678
0.3%
-20.9%
Natural gas rigs
110
-0.9%
-43.3%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, February 11, 2020
Change from
 
last week
last year
Vertical
30
-9.1%
-54.5%
Horizontal
713
0.3%
-22.1%
Directional
47
2.2%
-32.9%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2020-02-14
2020-02-07
change
East
527
569
-42
Midwest
639
694
-55
Mountain
 117
 126
-9
Pacific
198
202
-4
South Central
861
903
-42
Total
2,343
2,494
-151
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report
Working gas in underground storage
Historical comparisons
Year ago
(2/14/19)
5-year average
(2015-2019)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
402
31.1
453
16.3
Midwest
444
43.9
538
18.8
Mountain
88
33.0
126
-7.1
Pacific
140
41.4
217
-8.8
South Central
656
31.3
808
6.6
Total
1,730
35.4
2,143
9.3
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report


Temperature – heating & cooling degree days (week ending Feb 13)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
218
-48
-22
0
0
0
Middle Atlantic
201
-52
-30
0
0
0
E N Central
254
-22
-18
0
0
0
W N Central
296
14
-33
0
0
0
South Atlantic
118
-49
-10
14
7
1
E S Central
132
-34
6
0
0
-3
W S Central
104
-11
-22
4
0
1
Mountain
223
14
-33
0
-1
0
Pacific
109
4
-51
0
0
0
United States
187
-19
-27
3
2
0
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-day mean ending Feb 13, 2020

Mean Temperature (F) 7-Day Mean ending Feb 13, 2020

Source: National Oceanic and Atmospheric Administration

Deviation between average and normal (°F)

7-day mean ending Feb 13, 2020

Mean Temperature Anomaly (F) 7-Day Mean ending Feb 13, 2020

Source: National Oceanic and Atmospheric Administration