Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price rose 47 cents from $2.23 per million British thermal units (MMBtu) last Wednesday to $2.70/MMBtu yesterday.
• Henry Hub futures prices: The July 2023 NYMEX contract expired yesterday at $2.603/MMBtu, up 1 cent from last Wednesday. The August 2023 NYMEX contract price decreased to $2.668/MMBtu, down 1 cent from last Wednesday to yesterday. The price of the 12-month strip averaging August 2023 through July 2024 futures contracts declined 5 cents to $3.185/MMBtu.
• Select regional spot prices: Natural gas spot prices rose at all major pricing hubs this report week (Wednesday, June 21 to Wednesday, June 28). Price changes this week ranged from a 3 cent increase at SoCal Citygate to an increase of $4.43/MMBtu at Algonquin Citygate.
• At the Algonquin Citygate, which serves Boston-area consumers, the price went up $4.43 from $1.51/MMBtu last Wednesday to $5.94/MMBtu yesterday. Ongoing spring and summer maintenance on Enbridge Inc.’s Algonquin Gas Transmission (AGT) has resulted in several reductions in available capacity on the AGT system, limiting natural gas flows into New England. Specifically, the Stony Point compressor station in Rockland County, New York, has been operating at about 50% capacity (0.8 Bcf/d) since June 23. Price increases at other major Northeast pricing hubs ranged from 17 cents at Eastern Gas South in southwest Pennsylvania, which settled at $1.45/MMBtu yesterday, and 32 cents at the Transcontinental Pipeline Zone 6 trading point for New York City, which settled at $1.66/MMBtu yesterday. In the Appalachia production region, the Tennessee Zone 4 Marcellus spot price was unchanged from last Wednesday. According to data from S&P Global Commodity Insights, natural gas consumption in the Northeast increased 7%, or 1.0 billion cubic feet per day (Bcf/d) week over week. This increase was driven by a 10% (0.9 Bcf/d) increase in consumption in the electric power sector. Units 2 and 3 of Millstone Power Station, a 2,108 MW-nuclear power plant in Waterford, Connecticut, are currently offline. According to our Hourly Electric Grid Monitor, data from the New England Independent System Operator show the share of natural gas-fired power generation increased to an average of 70% so far this month from an average of 56% in May, and the share of nuclear-fired power generation averaged 12% this month, down from an average of 22% in May.
• Prices increased in all West Coast markets this report week. At PG&E Citygate in Northern California, the price rose 96 cents from $3.02/MMBtu last Wednesday to $3.98/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 3 cents from $4.80/MMBtu last Wednesday to $4.83/MMBtu yesterday. The price at Sumas on the Canada-Washington border rose 59 cents from $2.02/MMBtu last Wednesday to $2.61/MMBtu yesterday. Since the end of April, natural gas injections into Pacific Region working gas storage increased stocks by 112% (101 billion cubic feet). Despite the rapid build in inventories, natural gas stocks in the Pacific Region remain 35% below the five-year (2018–2022) average as of June 16. Capacity constraints on the Westcoast Energy pipeline system, which delivers natural gas from British Columbia into Washington, contributed to the increased prices in the Pacific Northwest.
• The prices across Texas increased this week. At the Houston Ship Channel, the price increased 26 cents from $2.25/MMBtu last Wednesday to $2.51/MMBtu yesterday. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, rose 31 cents from $2.11/MMBtu last Wednesday to $2.42/MMBtu yesterday. The Waha Hub traded 28 cents below the Henry Hub price yesterday, compared with last Wednesday when it traded 12 cents below the Henry Hub price. Temperatures continued to be higher than normal across Texas this week. In the San Antonio Area, temperatures averaged 89°F, which is almost 6°F above normal for this time of year, leading to 171 cooling degree days (CDDs). On Monday and Tuesday, San Antonio’s daily maximum temperature was 104°F. Demand for air conditioning increased because of the high temperatures, and electric power generation in ERCOT on Tuesday, June 27, was 17% higher than it was on Tuesday, June 13. Most of the increased electricity load was met by renewables, particularly wind generation. On Tuesday, the daily share of ERCOT electric power generation from wind was 25% compared with 13% two weeks ago.

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

• International futures prices: International natural gas futures price movements were mixed 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 46 cents to a weekly average of $11.96/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands decreased $1.45 to a weekly average of $10.72/MMBtu. In the same week last year (week ending June 29, 2022), the prices were $37.10/MMBtu in East Asia and $40.74/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 1 cent/MMBtu, averaging $5.65/MMBtu for the week ending June 28. Weekly average ethane prices rose 12% (40 cents/MMBtu), following natural gas prices at the Houston Ship Channel, which rose 12% (27 cents/MMBtu), resulting in an increase of the ethane premium to natural gas by 12% week over week. Ethylene spot prices remained relatively unchanged, decreasing the ethylene to ethane premium by 10%. Propane prices fell 3%, following the Brent crude oil price, which fell 3%, decreasing the propane discount relative to crude oil by 3%. The normal butane price fell 3%, the isobutane price fell 1%, and the natural gasoline price fell 8%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.9% (0.9 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.1% (0.1 Bcf/d) to 99.8 Bcf/d, and average net imports from Canada increased by 15.9% (0.8 Bcf/d) from last week to 5.9 Bcf/d.
• Demand: Total U.S. consumption of natural gas rose by 2.4% (1.6 Bcf/d), to 69.8 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 4.1% (1.6 Bcf/d) week over week. Industrial sector consumption was unchanged, and residential and commercial sector consumption increased by 1.2% (0.1 Bcf/d). Natural gas exports to Mexico decreased 1.6% (0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 11.5 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 5.1% (0.6 Bcf/d) week over week to average 11.5 Bcf/d this report week, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Texas increased by 2.5% (0.1 Bcf/d) to 4.1 Bcf/d, and deliveries to terminals in South Louisiana increased by 8.1% (0.5 Bcf/d) to 6.1 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-one LNG vessels (five from Sabine Pass; four from Freeport; three each from Calcasieu Pass, Cameron, and Corpus Christi; two from Elba Island; and one from Cove Point) with a combined LNG-carrying capacity of 75 Bcf departed the United States between June 22 and June 28, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, June 20, the natural gas rig count was unchanged from a week ago at 130 rigs; the Haynesville dropped one rig, and the Permian added one rig. The number of oil-directed rigs decreased by 6 rigs from a week ago to 546 rigs. The Permian dropped two rigs, the Williston dropped one rig, and three rigs were dropped in unidentified producing basins. The total rig count, which includes 6 miscellaneous rigs, stands at 682, which is 71 fewer rigs than last year at this time.

Storage

• Net injections into storage totaled 76 Bcf for the week ending June 23, compared with the five-year (2018–2022) average net injections of 80 Bcf and last year's net injections of 81 Bcf during the same week. Working natural gas stocks totaled 2,805 Bcf, which is 358 Bcf (15%) more than the five-year average and 566 Bcf (25%) 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 78 Bcf to 92 Bcf, with a median estimate of 82 Bcf.
• The average rate of injections into storage is 7% 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 8.8 Bcf/d for the remainder of the refill season, the total inventory would be 3,953 Bcf on October 31, which is 358 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