Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price rose 15 cents from $2.08 per million British thermal units (MMBtu) last Wednesday to $2.23/MMBtu yesterday.
• Henry Hub futures prices: The price of the July 2023 NYMEX contract increased 25.5 cents, from $2.342/MMBtu last Wednesday to $2.597/MMBtu yesterday. The price of the 12-month strip averaging July 2023 through June 2024 futures contracts climbed 14.8 cents to $3.171/MMBtu.
• Select regional spot prices: Natural gas spot prices rose at most locations this report week (Wednesday, June 14, to Wednesday, June 21), except for a few locations in the Northeast. Price changes at major pricing hubs this report week ranged from a decrease of 13 cents/MMBtu at Algonquin Citygate near Boston to an increase of $1.67/MMBtu at SoCal Citygate in Southern California.
• In the Northeast, prices remain low compared with the Henry Hub and fell slightly week over week. At the Algonquin Citygate, which serves Boston-area consumers, the price was down 13 cents from $1.64/MMBtu last Wednesday to $1.51/MMBtu yesterday. Similarly, at the Transcontinental Pipeline Zone 6 trading point for New York City, the price fell 14 cents from $1.48/MMBtu last Wednesday to $1.34/MMBtu yesterday. Total consumption of natural gas across all sectors combined in New England, New York, and New Jersey declined by 1.5%, or 0.1 billion cubic feet per day (Bcf/d), according to data from S&P Global Commodity Insights. Temperatures across most of the Northeast remained mild this week. In the Boston Area, temperatures averaged nearly 65°F, which is 4°F lower than normal. In the New York-Central Park Area, temperatures averaged 70°F this week, which is 3°F lower than normal, and fell to a daily average of 68°F on Wednesday.
• Across the southern United States, particularly in Texas, higher temperatures this week led to increased consumption of natural gas in the electric power sector, as demand for air conditioning increased. Across Texas, natural gas consumption in the electric power sector increased by 14% (0.9 Bcf/d), while across the Southeast region, consumption increased 4% (0.4 Bcf/d), according to data from S&P Global Commodity Insights. In the San Antonio Area, temperatures averaged 91°F this week, which is 8°F above normal, leading to 181 cooling degree days (CDDs), 34 more CDDs than last week.
• Along the West Coast, prices increased this week, in line with the Henry Hub, even as consumption in California declined slightly week over week. The price at PG&E Citygate in Northern California rose 16 cents, up from $2.86/MMBtu last Wednesday to $3.02/MMBtu yesterday, while in Southern California, the price at SoCal Citygate increased more than any other major hub this week, rising $1.67 from $3.13/MMBtu last Wednesday to $4.80/MMBtu yesterday. Consumption of natural gas across all sectors combined in California decreased by 2% (0.1 Bcf/d) to 3.8 Bcf/d week over week. In the Riverside Area, inland from Los Angeles, temperatures averaged 70°F this week, leading to 35 more CDDs and 5 fewer HDDs than last week.

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

• International futures prices: International natural gas futures prices increased this report week. According to Bloomberg Finance, L.P., weekly average front-month futures prices for liquefied natural gas (LNG) cargoes in East Asia increased $2.21 to a weekly average of $11.50/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands rose $1.77 to a weekly average of $12.17/MMBtu. In the same week last year (week ending June 22, 2022), the prices were $35.76/MMBtu in East Asia and $38.23/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 14 cents/MMBtu, averaging $5.66/MMBtu for the week ending June 21. Weekly average ethane prices rose 10%, following natural gas prices at the Houston Ship Channel, which rose 9%, widening the ethane premium to natural gas by 12% week over week. Ethylene spot prices rose by 1%, decreasing the ethylene to ethane premium by 6%. Propane prices fell 1%, while the Brent crude oil price rose 3%, increasing the propane discount relative to crude oil by 6%. The normal butane price rose 3%, the isobutane price rose 2%, and natural gasoline remained relatively unchanged.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas fell by 0.8% (0.8 Bcf/d) compared with the previous report week. Dry natural gas production decreased by 0.9% (0.9 Bcf/d) to 99.7 Bcf/d, the lowest weekly average volume over Natural Gas Weekly Update reporting weeks since February 8, 2023. Average net imports from Canada increased by 1.9% (0.1 Bcf/d) to 5.1 Bcf/d from last week.
• Demand: Total U.S. consumption of natural gas rose by 1.6% (1.1 Bcf/d) to 68.2 Bcf/d compared with the previous report week, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation climbed by 5.1% (1.8 Bcf/d) week over week. Industrial sector consumption decreased by 1.0% (0.2 Bcf/d) week over week, and consumption in the residential and commercial sectors declined by 5.3% (0.5 Bcf/d). Natural gas exports to Mexico increased 3.0% (0.2 Bcf/d) to 6.6 Bcf/d. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 10.9 Bcf/d, 0.4 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Overall weekly average natural gas deliveries to U.S. LNG export terminals decreased by 3.7% (0.4 Bcf/d) week over week to average 10.9 Bcf/d this report week, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Texas fell by 2.1% (0.1 Bcf/d) to 4.0 Bcf/d, largely due to decreased flows to the Freeport terminal, while deliveries to terminals in South Louisiana decreased by 5.7% (0.3 Bcf/d) to 5.6 Bcf/d, largely due to decreased flows to the Sabine Pass terminal. Natural gas deliveries to terminals outside the Gulf Coast were relatively unchanged at 1.2 Bcf/d.
• Vessels departing U.S. ports: Twenty-two LNG vessels (five each from Sabine Pass and Freeport; four from Corpus Christi; three from Cameron; two each from Calcasieu Pass and Elba Island; and one from Cove Point) with a combined LNG-carrying capacity of 82 Bcf departed the United States between June 15 and June 21, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, June 13, the natural gas rig count decreased by 5 rigs from a week ago to 130 rigs. Three rigs were added in the Utica, while five rigs were dropped in the Marcellus, one rig was dropped in the Eagle Ford, and two rigs were dropped in unidentified producing basins. This is the lowest number of natural gas-directed rigs since the first week of March 2022. The number of oil-directed rigs decreased by 4 from a week ago to 552 rigs. The Eagle Ford added three rigs, the Permian dropped four rigs, and three rigs were dropped in unidentified producing basins. This is the lowest number of oil-directed rigs since late April 2022. The total rig count, which includes 5 miscellaneous rigs, stands at 687.

Storage

• Net injections into storage totaled 95 Bcf for the week ending June 16, compared with the five-year (2018–2022) average net injections of 86 Bcf and last year's net injections of 76 Bcf during the same week. Working natural gas stocks totaled 2,729 Bcf, which is 362 Bcf (15%) more than the five-year average and 571 Bcf (26%) 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 88 Bcf to 98 Bcf, with a median estimate of 91 Bcf.
• The average rate of injections into storage is 8% 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 9.0 Bcf/d for the remainder of the refill season, the total inventory would be 3,957 Bcf on October 31, which is 362 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