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Natural Gas Weekly Update

for week ending November 11, 2020   |  Release date:  November 12, 2020   |  Next release:  November 19, 2020   |   Previous weeks


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

In the News:

Henry Hub price reaches $3.00 for first time since March 2019

On October 22, the natural gas spot price at the Henry Hub reached $3.00 per million British thermal units (MMBtu), its highest value since March 2019, according to Natural Gas Intelligence. Tightening natural gas supply and demand balances toward the end of October—driven by increasing liquefied natural gas (LNG) export demand and greater heating demand—have led the price at the Henry Hub to more than double in October from a low of $1.34/MMBtu on October 4.

Increased demand for U.S LNG exports has put upward pressure on the price at Henry Hub. Following a summer of LNG cargo cancellations and hurricane-related disruptions, LNG feedgas demand has recovered to pre-COVID levels. According to IHS Markit, since late-August, LNG feedgas volumes have increased by more than 8.0 billion cubic feet per day (Bcf/d), rising from 2.3 Bcf/d in the aftermath of Hurricane Laura, which made landfall on August 27, to a record high 10.4 Bcf/d by the end of October. The increase in LNG exports reflects a higher spread between the natural gas spot price at the Henry Hub and the Japan/Korea Marker (JKM) price—S&P Global Platts’ published price for LNG spot cargoes delivered into Asian markets—which improves netbacks from LNG exports leaving the United States.

Cooler-than-normal temperatures in the second half of October, particularly in the Great Plains and the Upper Midwest, have also contributed to tightening market conditions as a result of increases in natural gas heating demand. According to IHS Markit, combined residential and commercial natural gas consumption increased from a low of 8.3 Bcf/d on October 10 to about 27.0 Bcf/d by the end of October and averaged nearly 2.0 Bcf/d higher in October 2020 compared with October 2019.

The recent increases in natural gas demand have accompanied steady declines in natural gas production in 2020 that resulted from low natural gas and oil prices. Dry natural gas production has declined 6.7 Bcf/d since the start of the year, falling to an average of 87.6 Bcf/d in October, according to IHS Markit.

Mild temperatures in early November and a resulting decline in residential and commercial natural gas consumption have led to a slight pullback in the Henry Hub price in recent days. The Henry Hub price fell to as low as $2.59/MMBtu on November 9.

Overview:

(For the week ending Wednesday, November 11, 2020)

  • Natural gas spot prices rose at most locations this report week (Wednesday, November 4 to Wednesday, November 11). The Henry Hub spot price rose from $2.60 per million British thermal units (MMBtu) last Wednesday to $2.77/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the price of the December 2020 contract decreased 1¢, from $3.046/MMBtu last Wednesday to $3.031/MMBtu yesterday. The price of the 12-month strip averaging December 2020 through November 2021 futures contracts declined 1¢/MMBtu to $2.991/MMBtu.
  • The net injections to working gas totaled 8 billion cubic feet (Bcf) for the week ending November 6. Working natural gas stocks totaled 3,927 Bcf, which is 5% more than the year-ago level and 5% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 19¢/MMBtu, averaging $5.38/MMBtu for the week ending November 11. The price of ethane fell by 2%. The prices of propane, isobutane, natural gasoline, and butane rose by 4%, 5%, 6%, and 12%, respectively.
  • According to Baker Hughes, for the week ending Tuesday, November 3, the natural gas rig count decreased by 1 to 71. The number of oil-directed rigs rose by 5 to 226. The total rig count increased by 4, and it now stands at 300.

more summary data

Prices/Supply/Demand:

Prices rise at most locations outside of California. This report week (Wednesday, November 4 to Wednesday, November 11), the Henry Hub spot price rose 17¢ from $2.60/MMBtu last Wednesday to a high of $2.77/MMBtu yesterday. Temperatures were cooler than normal west of the Rocky Mountains and much warmer than normal east of the Rockies, especially in the Midwest and Northeast. Prices rose toward the end of the week with forecasts of colder temperatures and higher heating demand. At the Chicago Citygate, the price increased 19¢ from $2.39/MMBtu last Wednesday to a high of $2.58/MMBtu yesterday amid cold temperatures and snow at the end of the report week.

California prices fall with lower demand for heating and cooling. The price at SoCal Citygate in Southern California decreased $1.49 from a high of $5.76/MMBtu last Wednesday to $4.27/MMBtu yesterday, with temperatures averaging 60 degrees Fahrenheit. The price at PG&E Citygate in Northern California fell 16¢, down from a high of $4.05/MMBtu last Wednesday to $3.89/MMBtu yesterday.

Northeast prices end at weekly highs after a week of weather-driven volatility. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 74¢ from $0.84/MMBtu last Wednesday to a high of $1.58/MMBtu yesterday after reaching a low of $0.38/MMBtu on Friday. Temperatures in Boston were unseasonably warm, averaging 70 degrees Fahrenheit. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 84¢ from $0.64/MMBtu last Wednesday to a high of $1.48/MMBtu yesterday after reaching a low of $0.28/MMBtu on Friday.

The Tennessee Zone 4 Marcellus spot price increased 92¢ from $0.44/MMBtu last Wednesday to $1.36/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose 86¢ from $0.52/MMBtu last Wednesday to $1.38/MMBtu yesterday.

Permian Basin prices rise. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $2.39/MMBtu last Wednesday, 21¢/MMBtu lower than the Henry Hub average price. Yesterday, the price at the Waha Hub averaged a weekly high of $2.49/MMBtu, 28¢/MMBtu lower than the Henry Hub average weekly high. Record-high liquefied natural gas (LNG) feedgas demand from the Gulf coast market has recently contributed to the relatively high price at the Waha Hub.

Supply declines. According to data from IHS Markit, the average total supply of natural gas fell by 2.4% compared with the previous report week. Dry natural gas production decreased by 0.7% compared with the previous report week. Average net imports from Canada decreased by 31.9% from last week.

Demand falls, driven by lower building consumption, setting new November daily low. Total U.S. consumption of natural gas fell by 14.6% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation declined by 4.9% week over week. In the residential and commercial sectors, consumption declined by 34.6%, reaching a low of 12.5 Bcf on Saturday, the lowest November level since at least 2006. Industrial sector consumption decreased by 3.7% week over week. Natural gas exports to Mexico decreased 0.4%. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 10.2 Bcf/d, or 0.2 Bcf/d higher than last week, and reached 10.5 Bcf/d on November 11, surpassing the previous record high set last week.

U.S. LNG exports decrease week over week. Eighteen LNG vessels (eight from Sabine Pass, four from Cameron, three from Freeport, and one each from Elba Island, Cove Point, and Corpus Christi) with a combined LNG-carrying capacity of 65 Bcf departed the United States between November 5 and November 11, 2020, according to shipping data provided by Bloomberg Finance, L.P.

Storage:

The net injections into storage totaled 8 Bcf for the week ending November 6, compared with the five-year (2015–19) average net injections of 33 Bcf and last year's net injections of 12 Bcf during the same week. Working natural gas stocks totaled 3,927 Bcf, which is 176 Bcf more than the five-year average and 196 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 net withdrawals of 12 Bcf to net injections of 7 Bcf, with a median estimate of net withdrawals of 3 Bcf.

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

See also:

Daily Henry Hub price and natural gas consumption minus production


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
05-Nov
Fri,
06-Nov
Mon,
09-Nov
Tue,
10-Nov
Wed,
11-Nov
Henry Hub
2.66
2.60
2.59
2.71
2.77
New York
0.53
0.28
0.42
1.15
1.48
Chicago
2.19
1.96
2.33
2.54
2.58
Cal. Comp. Avg.*
3.40
3.15
3.56
3.52
3.59
Futures ($/MMBtu)
December contract
2.942
2.888
2.859
2.949
3.031
January contract
3.084
3.031
2.999
3.073
3.151
*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: (11/5/20 - 11/11/20)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
99.7
100.1
106.8
Dry production
88.4
89.1
95.0
Net Canada imports
3.4
5.0
5.1
LNG pipeline deliveries
0.1
0.1
0.1
Total supply
91.9
94.2
100.2

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

U.S. natural gas consumption - Gas Week: (11/5/20 - 11/11/20)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
62.2
72.8
82.2
    Power
24.0
25.2
28.1
    Industrial
22.0
22.9
23.7
    Residential/commercial
16.2
24.7
30.4
Mexico exports
5.4
5.4
5.3
Pipeline fuel use/losses
6.6
6.9
7.6
LNG pipeline receipts
10.2
10.1
7.0
Total demand
84.4
95.2
102.1

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, November 03, 2020
Change from
 
last week
last year
Oil rigs
226
2.3%
-67.0%
Natural gas rigs
71
-1.4%
-45.4%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, November 03, 2020
Change from
 
last week
last year
Vertical
22
10.0%
-56.9%
Horizontal
259
2.0%
-63.5%
Directional
19
-13.6%
-66.1%
Source: Baker Hughes Co.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2020-11-06
2020-10-30
change
East
942
947
-5
Midwest
1,127
1,119
8
Mountain
 243
 240
3
Pacific
322
320
2
South Central
1,293
1,293
0
Total
3,927
3,919
8
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report
Working gas in underground storage
Historical comparisons
Year ago
(11/6/19)
5-year average
(2015-2019)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
932
1.1
912
3.3
Midwest
1,107
1.8
1,094
3.0
Mountain
207
17.4
216
12.5
Pacific
291
10.7
316
1.9
South Central
1,195
8.2
1,212
6.7
Total
3,731
5.3
3,751
4.7
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report


Temperature – heating & cooling degree days (week ending Nov 05)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
172
37
48
0
0
0
Middle Atlantic
143
17
16
0
0
0
E N Central
135
-5
-43
0
0
0
W N Central
119
-30
-80
0
0
0
South Atlantic
90
11
0
17
1
-11
E S Central
95
16
-18
0
-3
-1
W S Central
53
8
-29
6
-7
-3
Mountain
80
-56
-78
11
7
7
Pacific
14
-47
-33
4
2
4
United States
97
-10
-28
5
0
-1
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-day mean ending Nov 05, 2020

Mean Temperature (F) 7-Day Mean ending Nov 05, 2020

Source: National Oceanic and Atmospheric Administration

Deviation between average and normal (°F)

7-day mean ending Nov 05, 2020

Mean Temperature Anomaly (F) 7-Day Mean ending Nov 05, 2020

Source: National Oceanic and Atmospheric Administration