U.S. Energy Information Administration - EIA - Independent Statistics and Analysis

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Natural Gas Weekly Update

for week ending March 3, 2021 | Release date: March 4, 2021 | Next release: March 11, 2021 | Previous weeks

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In the News:

U.S. LNG exports continued to grow in 2020

U.S. exports of liquefied natural gas (LNG) continued to grow in 2020, averaging 6.6 billion cubic feet per day (Bcf/d) on an annual basis and increasing 1.6 Bcf/d (32%) year-on-year, according to U.S. Energy Information Administration’s recently published Natural Gas Monthly, which now includes data through the end of 2020. U.S. LNG exports were at relatively high levels from January through May. In the summer months, they declined to record lows following record declines in international natural gas and LNG prices. By October, U.S. LNG exports started to increase, despite brief interruptions caused by hurricanes Laura and Delta. In November and December 2020, U.S. LNG exports reached an all-time high as spot prices in Asia increased following a period of extremely cold weather and unplanned outages at LNG export facilities in several countries reduced global LNG supply.

U.S. LNG exports increased as new LNG export capacity was added in 2020. The third and final liquefaction units (called trains) at Freeport LNG and Cameron LNG started commercial operations in May and August, respectively. The third train at the Corpus Christi LNG facility in Texas loaded its first cargo in December, six months ahead of schedule, and the remaining small-scale moveable modular liquefaction system units at Elba Island entered commercial service by August.

Asia overtook Europe to become the main destination for U.S. LNG exports in 2020, accounting for 47% (3.1 Bcf/d) of total exports, an increase of 1.2 Bcf/d (67%) compared to 2019. The largest increase in U.S. LNG exports was to China, which grew to 0.6 Bcf/d in 2020 after China lowered tariffs on imports of LNG from the United States from 25% to 10%. In comparison, in 2019, when tariffs were at 25%, only two LNG cargoes from the United States were shipped to China. India also increased imports of LNG from the United States by 0.1 Bcf/d year-on-year, particularly in the spring and summer months of 2020, when LNG prices were at record lows. U.S. LNG exports to Japan grew by 0.2 Bcf/d year-on-year, primarily in the fourth quarter of 2020 with the start of the new long-term contracts and increased seasonal winter demand.

U.S. LNG exports to Europe also increased in 2020, averaging 2.5 Bcf/d, an increase of 0.6 Bcf/d from the prior year. Europe was the main destination for U.S. LNG exports in 2019, accounting for 39% of total exports as warm winter weather in Asia and declining price differentials between spot natural gas prices in Europe and Asia led to increased volumes of U.S. LNG exports delivered to Europe. In 2020, compared to the prior year, U.S. LNG exports increased primarily to Turkey (by 0.3 Bcf/d), United Kingdom, Spain, Greece, and Lithuania (by about 0.1 Bcf/d to each country).

U.S. LNG exports to several countries in the Americas (including Colombia, Chile, Argentina, Mexico) and the Middle East (Jordan and the U.A.E.) declined by a combined 0.5 Bcf/d in 2020 compared to 2019. U.S. LNG exports to Mexico declined by 0.3 Bcf/d compared to 2019 as a result of COVID-19 mitigation efforts that reduced demand for natural gas in the first half of the year and as growing U.S. exports by pipeline continued to displace LNG imports. In contrast, Brazil more than doubled its LNG imports from the United States (an increase of 0.2 Bcf/d over the prior year) as drought conditions limited hydroelectric power generation, which increased demand for electricity generated by natural gas-fired power plants.

Overview:

(For the week ending Wednesday, March 3, 2021)

Natural gas spot prices were relatively flat at most locations this report week (Wednesday, February 24 to Wednesday, March 3) with most hubs rising less than $0.10/MMBtu week over week. The Henry Hub spot price rose from $2.75 per million British thermal units (MMBtu) last Wednesday to $2.84/MMBtu yesterday.
At the New York Mercantile Exchange (NYMEX), the March 2021 contract expired last Wednesday at $2.854/MMBtu. The April 2021 contract price increased to $2.816/MMBtu, up 2¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging April 2021 through March 2022 futures contracts climbed 2¢/MMBtu to $2.988/MMBtu.
The net withdrawals from working gas totaled 98 billion cubic feet (Bcf) for the week ending February 26. Working natural gas stocks totaled 1,845 Bcf, which is 13% lower than the year-ago level and 9% lower than the five-year (2016–2021) average for this week.
The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 2¢/MMBtu, averaging $8.03/MMBtu for the week ending March 3. The price of ethane declined 7%, reflecting lower average natural gas prices, which fell 34% from last week’s average. Prices of natural gasoline and propane fell by 1%. The prices of butane and isobutane rose by 8% and 6%, respectively, as a result of strong demand for motor gasoline blending.
According to Baker Hughes, for the week ending Tuesday, February 23, the natural gas rig count increased by 1 to 92. The number of oil-directed rigs rose by 4 to 309. The total rig count increased by 5. At 402, the total rig count is now at the highest level since the first week of May 2020.

more summary data

Prices/Supply/Demand:

Prices across the country moved within a narrow band this week, reflecting a gradual return to normal levels of production and demand. This report week (Wednesday, February 24 to Wednesday, March 3), the Henry Hub spot price rose 9¢ from $2.75/MMBtu last Wednesday to $2.84/MMBtu yesterday after reaching a weekly low of $2.65/MMBtu on Friday.

Prices across the Midwest increased slightly. The Midwest Regional Average price rose by 4¢/MMBtu, or 1%, from $2.67/MMBtu last Wednesday to $2.71/MMBtu yesterday. The Chicago Citygate price increased more than the regional average, increasing 8¢ from $2.68/MMBtu last Wednesday to $2.76/MMBtu yesterday after reaching a weekly high of $2.79/MMBtu on Tuesday.

California prices increased. The price at PG&E Citygate in Northern California rose 5¢, an increase from $3.69/MMBtu last Wednesday to $3.74/MMBtu yesterday after dropping to a weekly low of $3.58/MMBtu on Friday. The price at SoCal Citygate in Southern California increased 25¢ from $3.28/MMBtu last Wednesday to $3.53/MMBtu yesterday. The SoCal price increase was the result of reported maintenance on the El Paso Natural Gas Pipeline near the Hackberry, Arizona compressor station as well as maintenance on the Kern River Gas Transmission Company’s Goodsprings Compressor Station outside of Las Vegas, Nevada.

Prices in the Northeast rise in response to lower-than-normal temperatures late in the report week. At the Algonquin Citygate, which serves Boston-area consumers, the price went up $4.76 from $3.48/MMBtu last Wednesday to a weekly high of $8.24/MMBtu yesterday. Temperatures across New England fell approximately 12ºF lower than normal yesterday, and they are expected to remain lower than normal through the weekend. IHS Markit reports higher natural gas pipeline flows into the region and increased sendout from the Everett liquefied natural gas (LNG) import terminal. Estimated demand rose to 4,446 million cubic feet on March 2—the highest level since February 12. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 26¢ from $2.65/MMBtu last Wednesday to $2.91/MMBtu yesterday after falling to a weekly low of $2.34/MMBtu last Thursday. Temperatures across the Mid-Atlantic regions fell approximately 5ºF lower than normal on Tuesday and Wednesday, resulting in elevated residential heating demand.

Appalachia Basin production area prices rise in response to increased Northeast demand. Prices throughout the Appalachia region reached weekly highs yesterday. The Tennessee Zone 4 Marcellus spot price increased 13¢ from $2.31/MMBtu last Wednesday to $2.44/MMBtu yesterday. The price at Dominion South in Southwest Pennsylvania rose 11¢ from $2.39/MMBtu last Wednesday to $2.50/MMBtu yesterday.

Prices throughout the Permian production region were relatively flat week-over-week. After falling to $2.39/MMBtu, the price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $2.65/MMBtu last Wednesday, 10¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged $2.64/MMBtu, 20¢/MMBtu lower than the Henry Hub price. The West Texas/Southeast New Mexico average declined 2¢/MMBtu from $2.64/MMBtu last Wednesday to $2.62/MMBtu yesterday.

Prices at delivery points into the Pacific Northwest decline. The price at Sumas on the Canada-Washington border fell 7¢ from $2.71/MMBtu last Wednesday to $2.64/MMBtu yesterday. The price at the Opal Hub in Southwest Wyoming fell 8¢ from $2.75/MMBtu last Wednesday to $2.67/MMBtu yesterday. These price declines were reflected in lower prices at the Malin, Oregon hub, which supplies major demand centers in Oregon and Northern California. The Malin price fell 1¢/MMBtu from $2.75 last Wednesday to $2.74/MMBtu yesterday.

Supply continues to recover as estimated dry gas production rises to early February levels. According to data from IHS Markit, the average total supply of natural gas rose by 6.7% compared with the previous report week. Dry natural gas production grew by 10.1% compared with the previous report week, averaging more than 90 Bcf/d for the first time since the week ending February 10. Average net imports from Canada decreased by 31.7% from last week, reaching the lowest weekly average since the week ending December 1, 2020, reflecting growth in U.S. domestic production. Half of the total decline in pipeline imports from Canada was into the Midwest, where warmer-than-normal temperatures resulted in decreased heating demand for natural gas.

Demand declines as temperatures continue to rise across most of the Lower 48 states. Total U.S. consumption of natural gas fell by 12.8% compared with the previous report week, according to data from IHS Markit. The residential and commercial sectors led demand declines with a combined decline of 22.4%. Natural gas consumed for power generation declined by 5.2% week over week. Industrial sector consumption decreased by 4.2% week over week. Total exports increased. Pipeline natural gas exports to Mexico increased 8.4% to approximately 5.5 Bcf/d, approaching levels reported prior to the second week of February. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) also reached their highest levels since the week of February 10, averaging 9.8 Bcf/d, which was 2.3 Bcf/d higher than last week.

U.S. LNG exports increase week over week. Seventeen LNG vessels (five from Sabine Pass, three each from Cameron, Corpus Christi, and Freeport; two from Cove Point; and one from Elba Island) with a combined LNG-carrying capacity of 62 Bcf departed the United States between February 25 and March 3, according to shipping data provided by Marine Traffic.

Storage:

The net withdrawals from storage totaled 98 Bcf for the week ending February 26, compared with the five-year (2016–2021) average net withdrawals of 81 Bcf and last year's net withdrawals of 119 Bcf during the same week. Working natural gas stocks totaled 1,845 Bcf, which is 178 Bcf lower than the five-year average and 277 Bcf lower 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 109 Bcf to 162 Bcf, with a median estimate of 138 Bcf.

The average rate of withdrawals from storage is 22% higher than the five-year average so far in the withdrawal season (November through March). If the rate of withdrawals from storage matched the five-year average of 6.6 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,628 Bcf on March 31, which is 178 Bcf lower than the five-year average of 1,806 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.

Spot Prices ($/MMBtu)	Thu, 25-Feb	Fri, 26-Feb	Mon, 01-Mar	Tue, 02-Mar	Wed, 03-Mar
Henry Hub	2.69	2.65	2.70	2.83	2.84
New York	2.34	2.40	2.84	2.74	2.91
Chicago	2.53	2.59	2.65	2.79	2.76
Cal. Comp. Avg.*	2.99	2.96	3.03	3.19	3.19
Futures ($/MMBtu)
April contract	2.777	2.771	2.777	2.839	2.816
May contract	2.809	2.809	2.818	2.875	2.849
*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: (2/25/21 - 3/3/21)
	Average daily values (Bcf/d):
	this week	last week	last year
Marketed production	102.9	93.1	106.2
Dry production	91.1	82.7	93.5
Net Canada imports	4.6	6.7	5.0
LNG pipeline deliveries	0.1	0.4	0.2
Total supply	95.8	89.8	98.7
Source: IHS Markit Note: LNG pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (2/25/21 - 3/3/21)
	Average daily values (Bcf/d):
	this week	last week	last year
U.S. consumption	84.2	96.6	92.1
Power	25.4	26.8	29.4
Industrial	24.2	25.3	24.8
Residential/commercial	34.6	44.5	37.9
Mexico exports	5.5	5.1	5.4
Pipeline fuel use/losses	6.8	6.8	7.2
LNG pipeline receipts	9.8	7.4	8.6
Total demand	106.2	115.9	113.2
Source: IHS Markit Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

Rigs
	Tue, February 23, 2021	Change from
	Tue, February 23, 2021	last week	last year
Oil rigs	309	1.3%	-54.4%
Natural gas rigs	92	1.1%	-16.4%
Note: Excludes any miscellaneous rigs

Rig numbers by type
	Tue, February 23, 2021	Change from
	Tue, February 23, 2021	last week	last year
Vertical	25	4.2%	-30.6%
Horizontal	359	0.6%	-49.3%
Directional	18	12.5%	-60.9%
Source: Baker Hughes Co.

Working gas in underground storage
	Stocks billion cubic feet (Bcf)
Region	2021-02-26	2021-02-19	change
East	383	424	-41
Midwest	465	508	-43
Mountain	117	123	-6
Pacific	210	218	-8
South Central	670	670	0
Total	1,845	1,943	-98
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report

Working gas in underground storage
	Historical comparisons
	Year ago (2/26/20)		5-year average (2016-2020)
Region	Stocks (Bcf)	% change	Stocks (Bcf)	% change
East	460	-16.7	415	-7.7
Midwest	567	-18.0	507	-8.3
Mountain	103	13.6	113	3.5
Pacific	197	6.6	191	9.9
South Central	795	-15.7	796	-15.8
Total	2,122	-13.1	2,023	-8.8
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report

Temperature – heating & cooling degree days (week ending Feb 25)
		HDD deviation from:			CDD deviation from:
Region	HDD Current	normal	last year	CDD Current	normal	last year
New England	234	-12	16	0	0	0
Middle Atlantic	230	-4	22	0	0	0
E N Central	258	8	18	0	0	0
W N Central	254	3	-5	0	0	0
South Atlantic	151	3	4	9	1	-2
E S Central	157	13	2	0	-2	0
W S Central	113	19	5	2	-2	1
Mountain	201	12	-9	0	-1	0
Pacific	97	-1	8	0	-1	0
United States	191	5	9	2	-1	0
Note: HDD = heating degree day; CDD = cooling degree day Source: National Oceanic and Atmospheric Administration