Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell $1.38 from $7.99 per million British thermal units (MMBtu) last Wednesday to $6.61/MMBtu yesterday.
• Henry Hub futures prices: The October 2022 NYMEX contract expired yesterday at $6.868/MMBtu, down 91 cents from last Wednesday. The November 2022 NYMEX contract price decreased to $6.955/MMBtu, down 87 cents from last Wednesday to yesterday. The price of the 12-month strip averaging November 2022 through October 2023 futures contracts declined 50 cents to $5.741/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, September 21 to Wednesday, September 28). Week-over-week decreases at most major pricing hubs ranged from $0.70 to $2.00.
• Reduced electricity demand contributed to lower natural gas prices for the Florida market this report week. The Florida Gas Transmission (FGT) Citygate spot price, which reflects deliveries into Florida via the Florida Gas Transmission pipeline, decreased $2.74, more than other major trading hubs, from $9.61/MMBtu last Wednesday to $6.87/MMBtu yesterday. Natural gas consumption in the electric power sector in the Southeast declined by 10%, or 1.1 billion cubic feet per day (Bcf/d) week over week, and natural gas flows into Florida yesterday were down an estimated 26% (1.3 Bcf/d) from two days ago, according to data from PointLogic. In advance of Hurricane Ian, hundreds of thousands of residents evacuated parts of Florida, which contributed to reduced consumption of natural gas in the electric power sector. Widespread power outages reported across Florida as a result of the hurricane, which made landfall yesterday between Fort Myers and Tampa, will lead to lower natural gas consumption for power generation in the near term.
• In the Northeast, at the Algonquin Citygate, which serves Boston-area consumers, the price decreased $1.21 from $6.40/MMBtu last Wednesday to $5.19/MMBtu yesterday. At the Transco Zone 6 trading point for New York City, the price decreased $1.17 from $5.95/MMBtu last Wednesday to $4.78/MMBtu yesterday. In the Appalachia region, the Tennessee Zone 4 Marcellus spot price decreased $1.40 from $6.03/MMBtu last Wednesday to $4.63/MMBtu yesterday, and the price at Eastern Gas South in southwest Pennsylvania fell $1.35 from $6.10/MMBtu last Wednesday to $4.75/MMBtu yesterday. Temperatures in the Northeast region ranged within seasonal norms this report week and heating degree days (HDD) displaced cooling degree days (CDD). In the Pittsburgh Area, temperatures averaged 56°F, which resulted in 62 HDDs, or 28 HDDs more than normal. There were no CDDs this week, 10 CDDs lower than normal. Natural gas consumption decreased by 6%, or 0.9 Bcf/d this report week, according to data from PointLogic. Consumption in the electric power sector decreased by 25% (2.3 Bcf/d), while consumption in the residential and commercial sectors increased by 44% (1.3 Bcf/d).
• The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, fell $1.15 this report week, from $5.09/MMBtu last Wednesday to $3.94/MMBtu yesterday. On Monday, the Waha Hub fell to $1.77/MMBtu, the lowest price in 2022, and traded $4.98 below the Henry Hub price. This price difference represents the widest discount to Henry Hub since April 20, 2020, when the difference was -$6.45/MMBtu. The Waha Hub price fell to -$4.74/MMBtu that day. Wide discounts at the Waha Hub relative to the Henry Hub price generally reflect regional constraints on pipelines flowing natural gas to other markets.

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

• International futures prices: International natural gas futures prices declined this report week. According to Bloomberg Finance, L.P., weekly average futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased $4.20 to a weekly average of $39.77/MMBtu, and natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased $3.17 to a weekly average of $53.45/MMBtu.
• Natural gas plant liquids prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by $1.06/MMBtu, averaging $8.83/MMBtu for the week ending September 28. The price of ethane fell 16%, less than the natural gas price at the Houston Ship Channel, which fell 19%. Ethane moved to a 1 cent/MMBtu discount to natural gas this report week, compared with a 25 cents/MMBtu discount for the week ending September 21. The price of ethylene fell 4%, widening the ethylene to ethane premium by 19%. The natural gasoline price fell 3%, following the price of Brent crude oil, which fell 4%. The propane price fell 11%, widening the propane discount to crude oil by 14%. The normal butane and isobutane prices fell 9% and 7%, respectively.

Supply and Demand

• Supply: Overall natural gas supply in the United States rose by 0.4% (0.4 Bcf/d) compared with the previous report week, according to data from PointLogic. Dry natural gas production grew by 0.2% (0.2 Bcf/d) to 99.2 Bcf/d from last week, and average net imports from Canada increased by 3.1% (0.2 Bcf/d).
• Demand: Total U.S. consumption of natural gas fell by 1.0% (0.6 Bcf/d) compared with the previous report week, according to data from PointLogic. Declines in natural gas consumed for power generation of 12.1% (4.4 Bcf/d) week over week were almost offset by increases in consumption in the industrial sector of 2.8% (0.6 Bcf/d), and increases in consumption in the residential and commercial sectors of 35.2% (3.1 Bcf/d). Natural gas exports to Mexico increased 6.0% (0.3 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 11.6 Bcf/d, nearly 0.1 Bcf/d higher than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Natural gas deliveries to LNG export terminals in South Louisiana were relatively flat at 8.2 Bcf/d this week, while deliveries to terminals in South Texas increased slightly to 2.4 Bcf/d. Natural gas deliveries to other LNG export terminals were unchanged week over week, and overall natural gas deliveries to U.S. LNG export terminals averaged 11.6 Bcf/d this report week.
• Vessels departing U.S. ports: Twenty LNG vessels (eight from Sabine Pass, four each from Cameron and Corpus Christi, two from Calcasieu Pass, and one each from Cove Point and Elba Island) with a combined LNG-carrying capacity of 75 Bcf departed the United States between September 22 and September 28, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, September 20, the natural gas rig count decreased by 2 rigs from a week ago to 160 rigs. The Marcellus added one rig, while the Permian, the Utica, and an unspecified producing region each dropped one rig. The number of oil-directed rigs increased by 3 rigs from a week ago to 602 rigs. The Cana Woodford and the Permian each added two rigs, and the Arkoma Woodford and an unidentified producing region each added one rig. The Ardmore Woodford, the Granite Wash, and the Williston each dropped one rig. The total rig count, which includes 2 miscellaneous rigs, now stands at 764 rigs, which is 243 more than the same week last year.

Storage

• The net injections into storage totaled 103 Bcf for the week ending September 23, compared with the five-year (2017–2021) average net injections of 77 Bcf and last year's net injections of 86 Bcf during the same week. Working natural gas stocks totaled 2,977 Bcf, which is 306 Bcf (9%) lower than the five-year average and 180 Bcf (6%) 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 86 Bcf to 105 Bcf, with a median estimate of 99 Bcf.
• The average rate of injections into storage is 2% 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 9.5 Bcf/d for the remainder of the refill season, the total inventory would be 3,339 Bcf on October 31, which is 306 Bcf lower than the five-year average of 3,645 Bcf for that time of year.

Other Market Drivers

• Pipeline maintenance and outages in the Northeast also contributed to the decrease in that region’s prices week over week.
• Transcontinental Gas Pipeline Company (Transco) has planned maintenance on the mainline scheduled from September 7 through November 30. During this time certain pipeline segments will be removed from service to perform pipeline replacements. As a result, southbound natural gas flows out of the region through compressor station 195 in Harford County, Maryland, north of Baltimore, will be restricted.
• Tennessee Gas Pipeline Company (TGP) announced repairs needed at compressor station 307 in Forest County, Pennsylvania, near Marienville. TGP estimates reduced flows of up to 185 million cubic feet per day (MMcf/d) combined with other ongoing maintenance. The return to service date is unknown.
• Texas Eastern Transmission, LP (TE) continues to report an outage on Line 73 between Salineville compressor station in Columbiana County, Ohio, and Colerain compressor station in Jefferson County, Ohio. As a result of this outage, capacity through the Salineville compressor station has been reduced to zero since the outage was first reported on September 20, restricting westbound natural gas flows out of the region. TE anticipates the pipeline will be returned to service between September 30 and October 2.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook