Natural Gas

Overview:

(For the week ending Wednesday, November 18, 2020)

• Natural gas spot prices fell at most locations this report week (Wednesday, November 11 to Wednesday, November 18). The Henry Hub spot price fell from $2.77 per million British thermal units (MMBtu) last Wednesday to $2.36/MMBtu yesterday.
• At the New York Mercantile Exchange (NYMEX), the price of the December 2020 contract decreased 32¢, from $3.031/MMBtu last Wednesday to $2.712/MMBtu yesterday. The price of the 12-month strip averaging December 2020 through November 2021 futures contracts declined 21¢/MMBtu to $2.779/MMBtu.
• The net injections to working gas totaled 31 billion cubic feet (Bcf) for the week ending November 13. Working natural gas stocks totaled 3,958 Bcf, which is 8% more than the year-ago level and 6% more than the five-year (2015–19) average for this week.
• The natural gas plant liquids composite price at Mont Belvieu, Texas, remained flat at $5.38/MMBtu. The price of propane fell by 1%. The price of isobutane rose by 2%. The price of natural gasoline, ethane, and butane remained flat week over week.
• According to Baker Hughes, for the week ending Tuesday, November 10, the natural gas rig count increased by 2 to 73. The number of oil-directed rigs rose by 10 to 236. The total rig count increased by 12, and it now stands at 312.

more summary data

Prices/Supply/Demand:

Prices are down in most locations outside of the Northeast. This report week (Wednesday, November 11 to Wednesday, November 18), the Henry Hub spot price fell 41¢ from $2.77/MMBtu last Wednesday to a low of $2.36/MMBtu yesterday. Temperatures were generally warmer than normal across most of the Lower 48 states and colder than normal across the Great Lakes region. At the Chicago Citygate, the price decreased 50¢ from $2.58/MMBtu last Wednesday to a low of $2.08/MMBtu yesterday. The price at PG&E Citygate in Northern California fell 17¢, down from $3.89/MMBtu last Wednesday to $3.72/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 28¢ from a high of $4.27/MMBtu last Wednesday to $3.99/MMBtu yesterday.

Northeast prices rise in demand centers, fall in production areas. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 64¢ from a low of $1.58/MMBtu last Wednesday to $2.22/MMBtu yesterday after reaching a high of $4.36/MMBtu on Tuesday because of cold temperatures. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 22¢ from a low of $1.48/MMBtu last Wednesday to $1.70/MMBtu yesterday.

The Tennessee Zone 4 Marcellus spot price decreased 27¢ from $1.36/MMBtu last Wednesday to $1.09/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania fell 26¢ from $1.38/MMBtu last Wednesday to $1.12/MMBtu yesterday.

Permian Basin prices fall, widening discount to the Henry Hub. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $2.49/MMBtu last Wednesday, 28¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a low of $1.08/MMBtu, which was $1.28/MMBtu lower than the Henry Hub price. The decline in the price at the Waha Hub occurred in conjunction with a force majeure on the Natural Gas Pipeline Company of America (NGPL) pipeline which limited delivery to Sabine Pass from the Permian Basin—and several maintenance projects on the El Paso Natural Gas pipeline, according to S&P Platts.

Supply rises. According to data from IHS Markit, the average total supply of natural gas rose by 4.2% compared with the previous report week. Dry natural gas production grew by 2.5% compared with the previous report week and reached a high of 91.6 Bcf/d on November 18, the highest level of production since April. Average net imports from Canada increased by 47.8% from last week, with higher imports at border crossing points in the Midwest, according to Genscape.

Demand rises because of heating demand in buildings. Total U.S. consumption of natural gas rose by 22.8% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation rose by 2.6% week over week. In the residential and commercial sectors, consumption climbed by 81.9% with temperatures across the Lower 48 states generally averaging between 40 and 60 degrees Fahrenheit. Industrial sector consumption increased by 5.8% week over week. Natural gas exports to Mexico increased 1.1%. Natural gas deliveries to U.S. liquefied natural gas (LNG) export facilities (LNG pipeline receipts) averaged 10.2 Bcf/d, or 0.06 Bcf/d lower than last week.

U.S. LNG exports are flat week over week. Eighteen LNG vessels (seven from Sabine Pass, four from Cameron, three each from Corpus Christi and Freeport, and one from Cove Point) with a combined LNG-carrying capacity of 64 Bcf departed the United States between November 12 and November 18, 2020, according to shipping data provided by Bloomberg Finance, L.P. Two more tankers were loading on Wednesday, November 18—one at Freeport LNG terminal and one at Corpus Christi LNG.

Storage:

The net injections into storage totaled 31 Bcf for the week ending November 13, compared with the five-year (2015–19) average net withdrawals of 24 Bcf and last year's net withdrawals of 66 Bcf during the same week. Working natural gas stocks totaled 3,958 Bcf, which is 231 Bcf more than the five-year average and 293 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 19 Bcf to net injections of 41 Bcf, with a median estimate of net injections of 21 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 Analysis Reports
• Short-Term Energy Outlook