Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 85 cents from $8.68 per million British thermal units (MMBtu) last Wednesday to $7.83/MMBtu yesterday.
• Henry Hub futures prices: The price of the September 2022 NYMEX contract decreased to $8.266/MMBtu, down 29 cents from last Wednesday to yesterday. The price of the 12-month strip averaging September 2022 through August 2023 futures contracts declined 20 cents to $6.748/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations across the country this report week (Wednesday, July 27 to Wednesday, August 3). Week-over-week decreases at major pricing hubs ranged from 53 cents at Sumas in the Pacific Northwest to $1.16 at Waha in Texas, while a few major pricing hubs increased in price week over week, from 3 cents at Transco Zone 6 NY in the Northeast to 32 cents at SoCal Citygate in Southern California.
• In the Northeast, at the Algonquin Citygate, which serves Boston-area consumers, the spot price increased 22 cents from $8.31/MMBtu last Wednesday to $8.53/MMBtu yesterday. Algonquin Citygate prices traded below $8.00/MMBtu on most days this report week, reaching a low of $7.78/MMBtu on Thursday. At the Transco Zone 6 NY trading point for New York City, the price increased 3 cents from $8.08/MMBtu last Wednesday to $8.11/MMBtu yesterday, but on every other day of the report week it was below $8.00/MMBtu, reaching a low of $7.41/MMBtu on Tuesday. Temperatures in the Boston Area averaged 79°F this week, 4°F above normal but 3°F below last report week’s average, while in the New York Central Park Area, temperatures averaged 79°F this week, 3°F less than last week. Temperatures have been rising in recent days and are expected to increase further above normal in the Northeast through the weekend and into early next week.
• In the Pacific Northwest, the price at Sumas on the Canada-Washington border fell 52 cents from $7.95/MMBtu last Wednesday to $7.43/MMBtu yesterday. The price traded at a low over the report week of $6.32/MMBtu on Friday, in anticipation of temperatures returning to seasonal normals following a recent period of abnormally high temperatures. In the Seattle City Area, the daily average temperature was 80°F on Friday and declined to 68°F yesterday. Consumption of natural gas in the electric power sector in the Pacific Northwest has fallen more than 20% since Sunday.
• The price at SoCal Citygate in Southern California increased 32 cents from $9.06/MMBtu last Wednesday to $9.38/MMBtu yesterday, after reaching a weekly low of $8.60/MMBtu on Thursday. Natural gas consumption in the electric power sector across California increased by 0.4 billion cubic feet per day Bcf/d (16%) week over week, according to data from PointLogic.
• The FGT Citygate spot price, which reflects deliveries into Florida via the Florida Gas Transmission pipeline, remains elevated this report week, despite having fallen week over week by $1.55/MMBtu from $13.50/MMBtu last Wednesday to $11.95 yesterday, $4.12MMBtu above the Henry Hub spot price. The FGT Citygate price has averaged approximately $5.75/MMBtu above the Henry Hub spot price throughout July 2022, compared with a $0.23/MMBtu premium throughout July 2021. Williams’ Transco pipeline, which serves the Gulf Coast and Southeast regions, is currently operating at a reduced capacity of 1.6 Bcf/d, 20% below its design capacity of 2.0 Bcf/d, due to a constraint at Compressor Station 60, approximately 25 miles north-northwest of Baton Rouge in Louisiana. This constraint is affecting eastbound flows through the Gulf Coast states into the Southeast, particularly Florida.

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

International futures prices for East Asia were adjusted on August 11, 2022.

• International futures prices: International natural gas futures prices increased this report week. According to Bloomberg Finance, L.P., weekly average futures prices for liquefied natural gas (LNG) cargoes in East Asia increased $4.00 to a weekly average of $43.97/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, increased $5.90 to a weekly average of $59.54/MMBtu.
• Natural gas plant liquids prices: The natural gas plant liquids (NGPL) composite price at Mont Belvieu, Texas, fell by 41 cents/MMBtu, averaging $11.39/MMBtu for the week ending August 3. Ethane prices fell 8% following natural gas prices at the Houston Ship Channel, which fell 6%, narrowing the ethane premium to natural gas by 17%. The price of ethylene remained relatively unchanged, widening the ethylene to ethane spread by 79%. The Brent crude oil price fell 1%, pulling down the prices of the heavier NGPLs. The normal butane price fell 1%, the isobutane price fell 4%, and the natural gasoline price fell 2%. The propane price remained relatively unchanged, resulting in the propane discount to crude oil narrowing by 1%.

Supply and Demand

• Supply: According to data from PointLogic, the average total supply of natural gas rose by 0.5% (0.5 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.9% (0.9 Bcf/d), and average net imports from Canada decreased by 6.2% (0.4 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas fell by 1.8% (1.3 Bcf/d) compared with the previous report week, according to data from PointLogic. Temperatures that were closer to normal in most of the United States resulted in lower demand for air conditioning. Natural gas consumed for power generation declined by 2.7% (1.2 Bcf/d) week over week, and consumption in the residential and commercial sectors declined by 3.3% (0.3 Bcf/d). Industrial sector consumption increased by 0.7% (0.1 Bcf/d) week over week. Natural gas exports to Mexico decreased 8.8% (0.5 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 10.9 Bcf/d, or 0.1 Bcf/d higher than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Natural gas deliveries to LNG export terminals in South Louisiana increased by 2% (0.2 Bcf/d) this report week, according to data from PointLogic. Overall, feedgas deliveries to U.S. terminals increased by 0.1 Bcf/d (1%) week over week.
• Vessels departing U.S. ports: Twenty-two LNG vessels (eight from Sabine Pass, four each from Calcasieu Pass and Corpus Christi, three from Cameron, two from Cove Point, and one from Elba Island) with a combined LNG-carrying capacity of 81 Bcf departed the United States between July 28 and August 3 according to shipping data provided by Bloomberg Finance, L.P.
• LNG export terminals: Calcasieu Pass received approval from the Federal Energy Regulatory Commission (FERC) to place Blocks 5 and 6 in service, indicating that the commissioning phase for these blocks is complete and that they are now in commercial service. Freeport LNG issued a notice yesterday that it now expects to resume initial operations at its Freeport LNG terminal in early October, enabling it to produce approximately 2 Bcf/d of LNG.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, July 26, the natural gas rig count increased by 2 rigs from a week ago to 157 rigs. The Arkoma Woodford, the Haynesville, and an unspecified producing region each added one rig, and the Marcellus dropped one rig. The number of oil-directed rigs increased by 6 rigs to 605 rigs. The Arkoma Woodford added one rig, the Eagle Ford and the Permian each added two rigs, and six rigs were added in unspecified producing regions. The Cana Woodford dropped five rigs. One miscellaneous rig (neither oil- nor natural gas-directed) was added in the Marcellus. The total rig count now stands at 767 rigs, which is 279 rigs more than the same week last year.

Storage

• The net injections into storage totaled 41 Bcf for the week ending July 29, compared with the five-year (2017–2021) average net injections of 33 Bcf and last year's net injections of 16 Bcf during the same week. Working natural gas stocks totaled 2,457 Bcf, which is 12%, or 337 Bcf, lower than the five-year average and 10%, or 268 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 19 Bcf to 44 Bcf, with a median estimate of 33 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 9.0 Bcf/d for the remainder of the refill season, the total inventory would be 3,308 Bcf on October 31, which is 337 Bcf lower than the five-year average of 3,645 Bcf for that time of year.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook