Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price rose from $6.63 per million British thermal units (MMBtu) last Wednesday to $7.56/MMBtu yesterday.
• Henry Hub futures prices: The price of the August 2022 NYMEX contract increased $1.318, from $6.689/MMBtu last Wednesday to $8.007/MMBtu yesterday. The price of the 12-month strip averaging August 2022 through July 2023 futures contracts climbed 91.3 cents to $6.848/MMBtu.
• Select regional spot prices: Natural gas spot prices rose at most locations this report week (Wednesday, July 13, to Wednesday, July 20), and increases at major pricing hubs ranged from 87 cents at PG&E Citygate in Northern California to $17.86 at Algonquin Citygate in the Northeast.
• At the Algonquin Citygate, which serves Boston-area consumers, the price increased $17.86 week over week, from $6.11/MMBtu last Wednesday to $23.97/MMBtu yesterday, after a spike in the price yesterday from Tuesday’s price of $9.37/MMBtu. Temperatures in the Northeast have increased in recent days to above normal, and are expected to remain above normal over the next week. In the Boston Area, the average daily temperature reached 84°F on Wednesday, which is 10°F above normal. To the south, in the New York City Area, the average daily temperature reached 87°F on Wednesday, 9°F above normal. Weekly average natural gas consumption in the electric power sector in the Northeast increased 1.3 billion cubic feet per day (Bcf/d) (13%) week over week. On Tuesday, ISO New England, the Regional Transmission Organization serving the six New England states, reported “Abnormal Conditions” related to the current power system status. EIA’s New England Dashboard provided daily updates to current energy market conditions in the region.
• Prices in California rose this report week, as temperatures across California and the Desert Southwest remained above normal. The price at SoCal Citygate in Southern California increased $1.07 from $7.71/MMBtu last Wednesday to $8.78/MMBtu yesterday. The price at PG&E Citygate in Northern California rose 87 cents, up from $7.62/MMBtu last Wednesday to $8.49/MMBtu yesterday. Natural gas consumption in the electric power sector in California increased by 0.5 Bcf/d (25%) week over week. In the Desert Southwest, the Natural Gas Intelligence El Paso South Mainline/North Baja price rose 99 cents from $7.73/MMBtu last Wednesday to $8.72/MMBtu yesterday. Daily high temperatures in the Phoenix Area were above 110°F for all but one day this report week.
• In the Pacific Northwest, the price at Sumas on the Canada-Washington border rose $1.84 from $5.04/MMBtu last Wednesday to $6.88/MMBtu yesterday, even as total consumption in the Pacific Northwest remained effectively flat this report week. Temperatures in the Seattle City Area averaged 67°F, which is normal for this time of year. Increased production in Canada and increased upstream flow capacity have contributed to the price at Sumas trading at a discount to the Henry Hub spot price in recent weeks. On July 18, Enbridge, the operator of the Westcoast pipeline, which ships natural gas from the production region in northeastern British Columbia to Vancouver and the U.S-Canada border, posted a critical notice (#55977) of pipeline curtailment at Station 4B South, in inland British Columbia, resulting in reduced flows south toward the U.S. border.

Daily spot prices by region are available on the EIA website.

• International futures prices: International natural gas futures prices decreased this report week. According to Bloomberg Finance, L.P., weekly average futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased $1.02 to a weekly average of $38.11/MMBtu, and natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas spot market in Europe, decreased $4.29 to a weekly average of $47.59/MMBtu.
• Natural gas plant liquids prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 46 cents, averaging $11.78/MMBtu for the week ending July 20. Ethane prices rose 22% to $9.33/MMBtu after falling 17% during the week ending July 6. Despite the natural gas prices at the Houston Ship Channel rising 11%, the ethane premium to natural gas widened by 73% because of the increase in ethane price. The increase in ethane price also narrowed the ethylene to ethane spread by 56% despite the ethylene price rising 2%. The isobutane price remained relatively unchanged along with the Brent crude oil price. Natural gasoline and normal butane prices fell 4%. The propane price fell 3%, increasing the propane discount to crude oil by 7%.

Supply and Demand

• Supply: According to data from PointLogic, the average total supply of natural gas rose by 0.8% (0.8 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.6% (0.6 Bcf/d) compared with the previous report week. Average net imports from Canada increased by 3.0% (0.2 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas rose by 2.9% (2.1 Bcf/d) compared with the previous report week, according to data from PointLogic. Natural gas consumed for power generation climbed by 3.9% (1.6 Bcf/d) week over week. Industrial sector consumption increased by 0.8% (0.2 Bcf/d). In the residential and commercial sectors, consumption increased by 3.5% (0.3 Bcf/d). Natural gas exports to Mexico increased 2.3% (0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 10.9 Bcf/d, or 0.2 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Natural gas deliveries to LNG export terminals in South Louisiana decreased by 0.2 Bcf/d (3%) this report week, while deliveries to all other export terminals were effectively flat. Natural gas deliveries to all U.S. LNG export terminals declined by 0.2 Bcf/d (2%) week over week to 10.9 Bcf/d. At Calcasieu Pass in Cameron Parish, Louisiana, feedgas deliveries declined by 0.2 Bcf/d week over week, according to data from PointLogic.
• Vessels departing U.S. ports: Sixteen LNG vessels (eight from Sabine Pass, four from Corpus Christi, two from Cameron, and one each from Calcasieu Pass and Cove Point), with a combined LNG-carrying capacity of 61 Bcf, departed the United States between July 14 and July 20 according to shipping data provided by Bloomberg Finance, L.P.
• LNG import terminals: An LNG vessel discharged a cargo of approximately 3 Bcf at the Everett LNG Facility, near Boston, Massachusetts, operated by Constellation, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, July 13, the natural gas rig count was unchanged from a week ago at 153 rigs. The number of oil-directed rigs increased by 2 rigs to 599 rigs. The Granite Wash added two rigs, one rig was added in an unspecified producing region, and the Permian Basin dropped one rig. Two rigs were added in the miscellaneous (non-oil or natural gas) category, and the total rig count now stands at 756 rigs.

Storage

• Net injections into storage totaled 32 Bcf for the week ending July 15, compared with the five-year (2017–2021) average net injections of 41 Bcf and last year's net injections of 50 Bcf during the same week. Working natural gas stocks totaled 2,401 Bcf, which is 328 Bcf (12%) lower than the five-year average and 270 Bcf (10%) 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 34 Bcf to 59 Bcf, with a median estimate of 41 Bcf.
• The average rate of injections into storage is 5% lower than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 8.5 Bcf/d for the remainder of the refill season, the total inventory would be 3,317 Bcf on October 31, which is 328 Bcf lower than the five-year average of 3,645 Bcf for that time of year.

Other Market Drivers

• Tennessee Gas Pipeline (TGP) announced force majeure on two pipeline segments, both beginning last Thursday (July 13), reducing southbound flows by approximately 125 million cubic feet per day (MMcf/d) in Pennsylvania, and reducing flows by approximately 200 MMcf/d in Alabama. The force majeure in Alabama was lifted on July 16.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook