Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 14 cents from $2.24 per million British thermal units (MMBtu) last Wednesday to $2.10/MMBtu yesterday.
• Henry Hub futures prices: The June 2023 NYMEX contract expired Friday at $2.181/MMBtu, down 22 cents from last Wednesday. The July 2023 NYMEX contract price decreased to $2.266/MMBtu, down 30 cents from last Wednesday to yesterday. The price of the 12-month strip averaging July 2023 through June 2024 futures contracts declined 21 cents to $2.959/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, May 24, to Wednesday, May 31), except for prices in the Northeast. Price changes at major pricing hubs this report week ranged from a decrease of 29 cents/MMBtu at the Waha Hub in western Texas to an increase of $3.30/MMBtu at the Algonquin Citygate in the Northeast.
• Prices in the Northeast increased this report week, with most of the increase occurring since Monday. At the Algonquin Citygate, which serves Boston-area consumers, the price increased by $3.30/MMBtu, from $1.60/MMBtu last Wednesday to $4.90/MMBtu yesterday. Last Friday, the price at the Algonquin Citygate fell to a weekly low of $1.26/MMBtu. Temperatures in the Boston Area averaged 61°F this week, which is less than 1°F lower than normal for this time of year. Overall, there were 14 fewer heating degree days (HDDs) in the Boston Area this week than last week, and 4 more cooling degree days (CDDs). Natural gas consumption in the residential and commercial sectors in the Northeast decreased by 14%, or 0.6 billion cubic feet per day (Bcf/d) week over week, while natural gas consumption in the electric power sector increased 6% (0.4 Bcf/d), according to data from S&P Global Commodity Insights.
• Prices across the West fell this report week, except at Sumas on the Canada-Washington border, which increased slightly. In California, prices remain elevated relative to the Henry Hub. The price at PG&E Citygate in Northern California fell 11 cents, down from $3.18/MMBtu last Wednesday to $3.07/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 7 cents from $2.25/MMBtu last Wednesday to $2.18/MMBtu yesterday. Total consumption of natural gas in California decreased by 6% (0.2 Bcf/d) week over week, mostly due to a 26% (0.2 Bcf/d) decline in the electric power sector. The decline was partially offset by a 4% (0.1 Bcf/d) increase in consumption in the residential and commercial sectors. Temperatures across California were milder this week than last week. In the Riverside Area, east of Los Angeles, temperatures averaged 64°F this week, which is 5°F lower than last report week, leading to 24 fewer CDDs and 9 more HDDs.
• Across the Southeast, prices fell this report week. The Florida Gas Transmission Citygate spot price decreased by 7 cents from $2.52/MMBtu last Wednesday to $2.45/MMBtu yesterday. Natural gas consumption in the electric power sector in the Southeast declined by 6% (0.6 Bcf/d) week over week, while consumption in the residential and commercial sectors increased by 5% (less than 0.1 Bcf/d). In the Tampa Area, temperatures fell below normal this week, averaging 78°F, which is 5°F lower than last week, leading to 33 fewer CDDs.

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 42 cents to a weekly average of $9.31/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands fell $1.29 to a weekly average of $7.98/MMBtu. In the same week last year (week ending June 1, 2022), the prices were $23.30/MMBtu in East Asia and $27.67/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 31 cents/MMBtu, averaging $5.83/MMBtu for the week ending May 31. Weekly average ethane prices fell 3%, while natural gas prices at the Houston Ship Channel fell 11%, widening the ethane premium to natural gas by 12% week over week. Ethylene spot prices fell by 1%, increasing the ethylene to ethane premium by 1%. Propane prices fell 7%, and the Brent crude oil price fell 3%, resulting in a 2% increase in the propane discount relative to crude oil. The normal butane price fell 6%, the isobutane price fell 2%, and the natural gasoline price fell 4%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.5% (0.5 Bcf/d) week over week to average 106 Bcf/d. Dry natural gas production grew by 0.5% (0.5 Bcf/d), while average net imports from Canada remained relatively unchanged from last week.
• Demand: Total U.S. consumption of natural gas fell by 2.2% (1.4 Bcf/d) week over week to average 62.0 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation declined by 1.5% (0.5 Bcf/d) week over week, industrial sector consumption decreased by 0.6% (0.1 Bcf/d), and residential and commercial sector consumption declined by 7.6% (0.8 Bcf/d). Natural gas exports to Mexico increased 3.0% (0.2 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 13.3 Bcf/d, or 0.6 Bcf/d higher than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Overall weekly average natural gas deliveries to U.S. LNG export terminals increased by 4.7% (0.6 Bcf/d) week over week to average 13.3 Bcf/d this report week, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Texas increased by 13.5% (0.5 Bcf/d) to 4.3 Bcf/d, while deliveries to terminals in South Louisiana increased by 1.6% (0.1 Bcf/d) to 7.9 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-three LNG vessels (eight from Sabine Pass; four each from Corpus Christi and Freeport; three each from Calcasieu Pass and Cameron; and one from Cove Point) with a combined LNG-carrying capacity of 87 Bcf departed the United States between May 25 and May 31, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, May 23, the natural gas rig count fell by 4 rigs from a week ago to 137 rigs. One rig was added in the Eagle Ford, while three rigs were dropped in the Haynesville and two rigs were dropped in unidentified producing areas. The number of oil-directed rigs decreased by 5 rigs from a week ago to 570 rigs. One rig each was added in the Granite Wash and Permian, while two rigs were dropped in the Cana Woodford, one rig each was dropped in the Barnett and DJ-Niobrara, and three rigs were dropped in unidentified producing areas. The total rig count, which includes 4 miscellaneous rigs, stands at 711, which is 16 fewer rigs than last year at this time. This is the second consecutive week that the rig count has fallen below the same-week-last-year value.

Storage

• The net injections into storage totaled 110 Bcf for the week ending May 26, compared with the five-year (2018–2022) average net injections of 101 Bcf and last year's net injections of 82 Bcf during the same week. Working natural gas stocks totaled 2,446 Bcf, which is 349 Bcf (17%) more than the five-year average and 557 Bcf (29%) more than last year at this time.
• According to the Reuters survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 99 Bcf to 123 Bcf, with a median estimate of 106 Bcf.
• The average rate of injections into storage is 9% higher 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 3,944 Bcf on October 31, which is 349 Bcf higher than the five-year average of 3,595 Bcf for that time of year.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook