Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 24 cents from $3.35 per million British thermal units (MMBtu) last Wednesday to $3.11/MMBtu yesterday.
• Henry Hub futures prices: The price of the February 2023 NYMEX contract decreased 36 cents, from $3.671/MMBtu last Wednesday to $3.311/MMBtu yesterday. The price of the 12-month strip averaging February 2023 through January 2024 futures contracts declined 19.4 cents to $3.553/MMBtu.
• Select regional spot prices: Natural gas spot price changes were mixed this report week (Wednesday, January 11, to Wednesday, January 18), with increases at locations in the West and decreases at most locations east of the Rocky Mountains. Week-over-week price changes ranged from an increase of $8.57/MMBtu at Sumas to a decrease of $0.16/MMBtu at the Chicago Citygate.
• Natural gas prices remain elevated in the West this report week. The largest week-over-week increase was at Sumas on the Canada-Washington border where the price increased $8.57 from $9.66/MMBtu last Wednesday to $18.23/MMBtu yesterday. Both Westcoast Energy Inc. and Gas Transmission Northwest (pipelines that deliver natural gas into the Pacific Northwest from Canada at Sumas and Kingsgate, Idaho, respectively) reported curtailments on their systems. The price at PG&E Citygate in Northern California rose $1.30, up from $18.78/MMBtu last Wednesday to $20.08/MMBtu yesterday. At Malin, Oregon, the northern delivery point into the PG&E service territory, the price rose $2.67 from $16.07/MMBtu last Wednesday to $18.74/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $2.47 from $18.16/MMBtu last Wednesday to $20.63/MMBtu yesterday. Temperatures in the Riverside Area, inland from Los Angeles, averaged 51°F this week, 5°F below normal, which resulted in 94 heating degree days (HDD), 28 HDDs more than normal. Natural gas consumption in the West increased 1% this week, or 0.1 billion cubic feet per day (Bcf/d), according to data from S&P Global Commodity Insights. An increase in consumption of 7% (0.3 Bcf/d) in the residential and commercial sectors was partly offset by a decrease in the electric power sector of 5% (0.2 Bcf/d). Compared with the same week last year, natural gas consumption is 7% higher.
• At the Chicago Citygate, the price decreased 16 cents from $3.15/MMBtu last Wednesday to $2.99/MMBtu yesterday. Temperatures in the Chicago Area averaged 37°F this report week, 12°F above normal, which resulted in 193 HDDs, 88 HDDs fewer than normal. According to data from S&P Global Commodity Insights, natural gas consumption in the Mid-Continent decreased 4% (1.0 Bcf/d) week over week, including a 6% decrease (0.3 Bcf/d) in the electric power sector and a 5% decrease (0.6 Bcf/d) in the residential and commercial sectors. Industrial consumption also fell by 1% (0.1 Bcf/d).
• In the Northeast, at the Algonquin Citygate, which serves Boston-area consumers, the price went down 14 cents from $3.38/MMBtu last Wednesday to $3.24/MMBtu yesterday. Although relatively unchanged week over week, Algonquin Citygate prices fluctuated during the week, and recorded a weekly high of $7.15/MMBtu on January 13. Other prices in the Northeast were relatively stable, remaining below $3/MMBtu most of the week. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 3 cents from $2.79/MMBtu last Wednesday to $2.82/MMBtu yesterday. The Tennessee Zone 4 Marcellus spot price increased 8 cents from $2.50/MMBtu last Wednesday to $2.58/MMBtu yesterday. The price at Eastern Gas South in southwest Pennsylvania fell 5 cents from $2.48/MMBtu last Wednesday to $2.43/MMBtu yesterday. Natural gas consumption in the Northeast was essentially unchanged at 25.8 Bcf/d this week, according to data from S&P Global Commodity Insights. Compared with the same week last year, natural gas consumption is 10% lower.

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 front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia decreased $2.82 to a weekly average of $24.85/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas market in Europe, decreased $1.92 to a weekly average of $20.10/MMBtu. In the same week last year (week ending January 19, 2022), the prices in East Asia and at TTF were $27.38/MMBtu and $27.24/MMBtu, respectively.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 51 cents/MMBtu, averaging $8.17/MMBtu for the week ending January 18. Ethane prices fell 7%, while average weekly natural gas prices at the Houston Ship Channel fell 1% week over week, narrowing the ethane premium to natural gas by 19%. Ethylene spot prices rose 5%, widening the ethylene to ethane premium by 39%. Propane prices rose 12%, while the weekly average price of Brent crude oil rose 7%, resulting in a 2% decrease in the propane discount relative to crude oil. Normal butane prices rose 7%, and isobutane prices rose 6%. Natural gasoline prices rose 11%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.1% (less than 0.1 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.3% (0.3 Bcf/d), and average net imports from Canada decreased by 4.9% (0.3 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas rose by 0.5% (0.5 Bcf/d) compared with the previous report week, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation rose by 1.0% (0.3 Bcf/d) week over week. Industrial sector consumption was essentially unchanged, and in the residential and commercial sectors, consumption increased by 0.4% (0.2 Bcf/d). Although total consumption increased week over week, consumption in the first 18 days of January was 12% lower compared with the same days last year. Above-normal temperatures throughout most of the country have led to reduced demand for natural gas for space heating compared with a year ago. Natural gas exports to Mexico increased 0.7% (less than 0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.4 Bcf/d, or 0.1 Bcf/d higher than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Overall natural gas deliveries to U.S. LNG export terminals were essentially unchanged, increasing by less than 0.1 Bcf/d week over week to average 12.4 Bcf/d this report week, according to data from S&P Global Commodity Insights.
• Vessels departing U.S. ports: Twenty-two LNG vessels (nine from Sabine Pass, five from Corpus Christi, and four each from Cameron and Calcasieu Pass) with a combined LNG-carrying capacity of 82 Bcf departed the United States between January 12 and January 18, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, January 10, the natural gas rig count decreased by 2 rigs from a week ago to 150 rigs. The Eagle Ford and the Haynesville dropped one rig each. The number of oil-directed rigs increased by 5 rigs from a week ago to 623 rigs. The Eagle Ford and the Permian each added three rigs, the Mississippian added one rig, and two rigs were added in unidentified producing regions. The Cana Woodford dropped two rigs, and the Barnett and DJ-Niobrara each dropped one rig. The total rig count, which includes 2 miscellaneous rigs, now stands at 775 rigs.

Storage

• The net withdrawals from storage totaled 82 Bcf for the week ending January 13, compared with the five-year (2018–2022) average net withdrawals of 156 Bcf and last year's net withdrawals of 203 Bcf during the same week. Working natural gas stocks totaled 2,820 Bcf, which is 34 Bcf (1%) more than the five-year average and 19 Bcf (1%) 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 13 Bcf to 89 Bcf, with a median estimate of 73 Bcf.
• The average rate of withdrawals from storage is 17% lower 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 16.3 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,566 Bcf on March 31, which is 34 Bcf higher than the five-year average of 1,532 Bcf for that time of year.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook