Natural Gas

Overview:

(For the week ending Wednesday, April 7, 2021)

• Natural gas spot prices fell at most locations this report week (Wednesday, March 31 to Wednesday, April 7) as temperatures moderated across the country. The Henry Hub spot price fell from $2.49 per million British thermal units (MMBtu) last Wednesday to $2.38/MMBtu yesterday.
• At the New York Mercantile Exchange (NYMEX), the price of the May 2021 contract decreased 9¢, from $2.608/MMBtu last Wednesday to $2.520/MMBtu yesterday. The price of the 12-month strip averaging May 2021 through April 2022 futures contracts declined 3¢/MMBtu to $2.750/MMBtu.
• The net injections to working gas totaled 20 billion cubic feet (Bcf) for the week ending April 2. Working natural gas stocks totaled 1,784 Bcf, which is 12% lower than the year-ago level and 1% lower than the five-year (2016–2021) average for this week.
• The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 20¢/MMBtu, averaging $7.61/MMBtu for the week ending April 7. The prices of butane and isobutane followed crude oil prices down, falling by 2% and 1%, respectively. The prices of natural gasoline, ethane, and propane rose by 1%, 1%, and 6%, respectively, reflecting continuing recovery in the petrochemical sector, where they are used as feedstock.
• According to Baker Hughes, for the week ending Tuesday, March 30, the natural gas rig count decreased by 1 to 91. The number of oil-directed rigs rose by 13 to 337. The total rig count increased by 13, and it now stands at 430. Since the start of October 2020, the total rig count has increased 24 out of 27 weeks.

more summary data

Prices/Supply/Demand:

Prices in most markets fall as moderating temperatures lead to lower demand across most sectors. This report week (Wednesday, March 31 to Wednesday, April 7), the Henry Hub spot price fell 11¢ from $2.49/MMBtu last Wednesday to $2.38/MMBtu yesterday, 2¢/MMBtu above the weekly low of $2.36 set on Tuesday.

Midwest prices fall as temperatures in major consumption centers rise above 65°F at the end of the report week. Temperatures in Chicago reached 70°F and 71°F on Tuesday and Wednesday, respectively, 25°F above normal. At the Chicago Citygate, the price decreased 15¢ from $2.55/MMBtu last Wednesday to $2.40/MMBtu yesterday after reaching a weekly low of $2.23/MMBtu on Monday.

Prices in Northern and Southern California move in opposite directions. After a number of weeks of cooler-than-normal temperatures, weather across California returned to normal- to above-normal temperatures, reducing demand for space heating across the state. The price at PG&E Citygate in Northern California fell 9¢, down from $3.64/MMBtu last Wednesday to a weekly low of $3.55/MMBtu yesterday. Work on the Bethany Compressor Station in the Bay Area continues, but PG&E is no longer reporting capacity constraints on its Redwood Path as it did last week.

The price at SoCal Citygate in Southern California increased 13¢ from $3.00/MMBtu last Wednesday to a weekly high of $3.13/MMBtu yesterday after falling to 2.83/MMBtu on Monday. SoCalGas reports maintenance on the Wheeler Ridge compressor station, which has reduced flows by approximately 400 million cubic feet per day (MMcf/d) starting yesterday. The maintenance is expected to last through April 14, 2021.

Prices in the Northeast also fall as temperatures across the region rose above normal later in the report week. At the Algonquin Citygate, which serves Boston-area consumers, the price fell throughout the report week, declining 62¢ from $2.54/MMBtu last Wednesday to a weekly low of $1.92/MMBtu yesterday. Temperatures in Boston were in the 50’s Monday through Wednesday of this report week, up to 9°F above normal. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price also reached a weekly low yesterday, falling 58¢ from $2.43/MMBtu last Wednesday to $1.85/MMBtu yesterday.

Prices in the Appalachia Basin-producing region fall along with declining demand. IHS Markit reports Northeast supply was 4 Bcf/d above demand for the first time since the third week of October 2020. The Tennessee Zone 4 Marcellus spot price decreased 25¢ from $1.99/MMBtu last Wednesday to $1.74/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania fell 32¢ from $2.12/MMBtu last Wednesday to $1.80/MMBtu yesterday. Both pricing points reported their lowest weekly prices on Monday, at $1.60/MMBtu and $1.73/MMBtu, respectively.

Prices in the Permian production region decrease but by less than the Henry Hub spot price. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $2.28/MMBtu last Wednesday, 21¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged $2.24/MMBtu, 4¢/MMBtu lower than last week and 14¢/MMBtu lower than the Henry Hub price.

U.S. production continues to increase. According to data from IHS Markit, the average total supply of natural gas rose by 0.6% compared with the previous report week. Dry natural gas production grew by 0.5% compared with the previous report week to average 92.3 Bcf/d, which is almost the same level as (92.7 Bcf/d) for the same week last year. Average net imports from Canada increased by 4.1% from last week.

Demand for U.S. natural gas fell in all sectors except for deliveries to LNG facilities. Total U.S. consumption of natural gas fell by 2.0% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation declined by 4.0% week over week. Industrial sector consumption decreased slightly by 0.6% week over week. In the residential and commercial sectors, consumption declined by 1.2% as a result of mild temperatures. Natural gas exports to Mexico decreased 8.8% as a result of scheduled seasonal maintenance on pipelines in Mexico. Natural gas deliveries to U.S. liquefied natural gas (LNG) export facilities (LNG pipeline receipts) averaged 11.7 Bcf/d, or 0.09 Bcf/d higher than last week and 30% higher than the same period last year.

U.S. LNG exports decrease week over week. Twenty-one LNG vessels (eight from Sabine Pass, four each from Cameron and Corpus Christi, three from Freeport, and one each from Cove Point and Elba Island) with a combined LNG-carrying capacity of 76 Bcf departed the United States between April 1 and April 7, 2021, according to shipping data provided by Bloomberg Finance, L.P.

Storage:

The net injections into storage totaled 20 Bcf for the week ending April 2, compared with the five-year (2016–2021) average net injections of 8 Bcf and last year's net injections of 30 Bcf during the same week. Working natural gas stocks totaled 1,784 Bcf, which is 24 Bcf lower than the five-year average and 235 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 injections of 11 Bcf to 30 Bcf, with a median estimate of 22 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