Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price rose 9 cents from $2.03 per million British thermal units (MMBtu) last Wednesday to $2.12/MMBtu yesterday.
• Henry Hub futures prices: The price of the June 2023 NYMEX contract increased 2.1 cents, from $2.170/MMBtu last Wednesday to $2.191/MMBtu yesterday. The price of the 12-month strip averaging June 2023 through May 2024 futures contracts declined 2.5 cents to $2.917/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, May 3, to Wednesday, May 10), with few exceptions. Price changes at major pricing hubs this report week ranged from a decrease of $1.01/MMBtu at the Waha hub in West Texas to an increase of 9 cents/MMBtu at Henry Hub in Louisiana. Spot prices remain at historically low levels at many pricing locations.
• Prices across the United States, with the notable exceptions of the Henry Hub and PG&E Citygate, finished the week below $2/MMBtu as the United States experienced mild weather conditions. The Henry Hub price was the second highest of all price hubs in the United States this week, trailing only the PG&E Citygate price.
• Prices at the Waha hub in West Texas fell with reduced natural gas takeaway capacity from the Permian Basin. Prices dipped into negative territory this week, reaching a weekly low of -$0.38/MMBtu on May 9 before finishing the report week at $0.35/MMBtu yesterday, down from $1.36/MMBtu last Wednesday. Maintenance on the eastbound section of the Permian Highway Pipeline (PHP) began Tuesday, reducing capacity by approximately 1 billion cubic feet per day (Bcf/d), or about 48%, on May 9 to 1.1 Bcf/d. PHP capacity is expected to rise to 1.65 Bcf/d on May 11 and return to full capacity of 2.1 Bcf/d on May 13.
• Prices across the Northeast fell this report week as temperatures rose, leading to lower heating demand in the residential and commercial sectors. Natural gas consumption declined in line with seasonal trends, putting downward pressure on prices, as production remained high. The Tennessee Zone 4 Marcellus spot price fell 8 cents/MMBtu from $1.19/MMBtu last Wednesday to $1.11/MMBtu yesterday, the third lowest among major pricing hubs in the United States. In the New York-Central Park Area, temperatures averaged 61°F this report week, leading to 30 heating degree days (HDDs) and 4 cooling degree days (CDDs), 58 fewer HDDs and 4 more CDDs than the previous week. In the Northeast, week-over-week consumption of natural gas in all sectors fell 13%, led by a 35% (2.7 Bcf/d) decrease in residential and commercial sector consumption.
• Prices in California declined this week, in line with most other areas of the United States. The price at SoCal Citygate in Southern California decreased 19 cents from $1.99/MMBtu last Wednesday to $1.80/MMBtu yesterday. The price at SoCal Citygate reached a weekly low of $1.75/MMBtu on May 4, the lowest price since July 24, 2020, when the price was $1.71/MMBtu. In the Riverside Area, inland from Los Angeles, temperatures averaged 60°F, down 4°F from the previous week, leading to 30 HDDs, up 13 HDDs from the previous week. In Northern California, the price at PG&E Citygate fell 58 cents from $4.74/MMBtu last Wednesday to $4.16/MMBtu yesterday. Prices at PG&E Citygate remain the highest among major hubs due to two major maintenance events on PG&E pipelines that bring natural gas into the consumption area. Both the Redwood path, delivering natural gas from the north, and the Baja path, delivering natural gas from the southwest, are undergoing maintenance that has reduced system deliverability by close to 0.8 Bcf/d. The price at Sumas on the Canada-Washington border fell 29 cents from $1.35/MMBtu last Wednesday to $1.06/MMBtu yesterday, as consumption of natural gas for electric power fell on the week. Power sector consumption in the Pacific Northwest fell 62% from the previous week, data from S&P Global Commodity Insights showed. Since April 11 through yesterday, the share of electricity generated from natural gas in the Northwest region has declined from 22% to 14%, while the share of hydroelectric generation has increased from 25% to 54%.

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 fell 26 cents to a weekly average of $11.28/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands fell 71 cents to a weekly average of $11.61/MMBtu. In the same week last year (week ending May 11, 2022), the prices were $23.54/MMBtu in East Asia and $30.59/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 25 cents/MMBtu, averaging $6.24/MMBtu for the week ending May 10. Weekly average ethane prices fell 3%, while natural gas prices at the Houston Ship Channel fell 4%, narrowing the ethane premium to natural gas by 1% week over week. Ethylene spot prices fell by 8%, decreasing the ethylene to ethane premium by 10%. Propane prices fell 3%, while the Brent crude oil price fell by 2%, resulting in a 1% decrease in the propane discount relative to crude oil. The normal butane price fell 5%, isobutane fell 10%, and natural gasoline fell 3%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas fell by 1.2% (1.2 Bcf/d) compared with the previous report week. Dry natural gas production decreased by 1.0% (1.0 Bcf/d), and average net imports from Canada decreased by 4.7% (0.2 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas fell by 7.3% (5.1 Bcf/d) compared with the previous report week, according to data from S&P Global Commodity Insights. The residential and commercial sectors led the decline, with consumption declining by 32.8% (6.5 Bcf/d), as moderate temperatures were observed across most of the United States this report week. Industrial sector consumption decreased by 3.7% (0.8 Bcf/d) week over week. Natural gas consumed for power generation climbed by 7.6% (2.2 Bcf/d) week over week. Natural gas exports to Mexico increased 7.1% (0.4 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.9 Bcf/d, or 0.6 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals decreased by 4.2%, or 0.6 Bcf/d, week over week to average 12.9 Bcf/d this report week, according to data from S&P Global Commodity Insights. This is the third week in a row of declining natural gas deliveries to U.S. LNG export terminals. Demand for feedgas at U.S. export terminals typically declines at this time of year, when exports are seasonally lower. Natural gas deliveries to terminals in South Texas decreased by 7.5%, or 0.3 Bcf/d, to 4.2 Bcf/d, and deliveries to terminals in South Louisiana decreased by 2.6%, or 0.2 Bcf/d, to 7.5 Bcf/d. Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d.
• Vessels departing U.S. ports: Twenty-four LNG vessels (nine from Sabine Pass; five from Corpus Christi; four from Freeport; three from Calcasieu Pass; two from Cameron; and one from Cove Point) with a combined LNG-carrying capacity of 90 Bcf departed the United States between May 4 and May 10, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, May 2, the natural gas rig count decreased by 4 to 157. The Eagle Ford dropped two rigs, the Haynesville dropped one rig, and one rig was dropped in unspecified producing regions. The number of oil-directed rigs fell by 3 to 588. The Granite Wash, Eagle Ford, and Williston each dropped one rig, and the Permian dropped five rigs. The Cana Woodford added one rig and four rigs were added in unspecified producing regions. The total rig count decreased by 7, and it now stands at 748, which includes 3 miscellaneous rigs.

Storage

• The net injections into storage totaled 78 Bcf for the week ending May 5, compared with the five-year (2018–2022) average net injections of 87 Bcf and last year's net injections of 76 Bcf during the same week. Working natural gas stocks totaled 2,141 Bcf, which is 332 Bcf (18%) more than the five-year average and 509 Bcf (31%) more 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 67 Bcf to 82 Bcf, with a median estimate of 78 Bcf.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook