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Natural Gas Weekly Update

for week ending July 5, 2023   |  Release date:  July 6, 2023   |  Next release:  July 13, 2023   |   Previous weeks

JUMP TO: Prices | Supply and Demand | Liquefied Natural Gas (LNG) | Rig Count | Storage | Other Market Drivers
We will update storage data on Friday, July 7, following the release of our Weekly Natural Gas Storage Report at 10:30 a.m. eastern time.

In the News:

Natural gas prices fall in first half of 2023 amid high production, high storage levels

From January to June 2023, the average monthly spot natural gas price at the U.S. benchmark Henry Hub fell 34%, or $1.12 per million British thermal units (MMBtu), to an average of $2.18/MMBtu in June, according to data from Refinitiv Eikon. In January, the Henry Hub price averaged $3.30/MMBtu (when adjusted for inflation) and then averaged below $2.50/MMBtu from February through June as mild winter weather, record-high production, and higher-than-average inventories contributed to lower natural gas prices. The average price during this time was the lowest average monthly Henry Hub price since June 2020, when prices averaged $1.93/MMBtu (when adjusted for inflation). Prices for the first half of the year are down 62%, or $3.96/MMBtu, compared with the first half of 2022 (when adjusted for inflation).

Temperatures in the Lower 48 states were warmer than historical averages from January through March 2023, resulting in 16% fewer population-weighted heating degree days (HDDs) throughout the United States in January 2023 and 12% fewer HDDs in February compared with the five-year (2018–2022) average. Fewer HDDs led to lower-than-average consumption of natural gas for space heating and lower storage inventory withdrawals compared with the five-year average. Natural gas consumption in January and February fell to five-year lows as regions of the United States where natural gas is used for space heating, such as the Northeast and Midwest, experienced above-average temperatures. Overall U.S. consumption averaged 103.0 billion cubic feet per day (Bcf/d) between January and March, a decrease of 1.9 Bcf/d from the same period in 2022, according to our Natural Gas Monthly.

From April through June, natural gas consumption was up about 1.6 Bcf/d compared with the same period in 2022, according to our Short-Term Energy Outlook (STEO). However, the rise in consumption was more than offset by an increase in dry natural gas production. In the first six months of 2023, dry natural gas production rose an estimated 6.2 Bcf/d compared with last year, contributing to lower natural gas prices in 2023. Dry natural gas production has remained at record-high levels in 2023, averaging over 101.0 Bcf/d each month.

Lower natural gas demand for space heating combined with high production contributed to less natural gas withdrawn from storage during the winter and more natural gas injected into storage in the spring. Storage inventories in the Lower 48 states finished the withdrawal season (October 31–March 31) at 1,830 billion cubic feet (Bcf), which was 19% (294 Bcf/d) above the five-year average, according to our Weekly Natural Gas Storage Report.

Storage inventories have remained well above the five-year average so far this summer injection season (April 1–October 31), as temperatures have remained mild for most of the season and dry natural gas production continues at high levels, placing further downward pressure on Henry Hub spot prices.

Market Highlights:

(For the week ending Wednesday, July 5, 2023)

Prices

  • Henry Hub spot price: The Henry Hub spot price fell 6 cents from $2.70 per million British thermal units (MMBtu) last Wednesday to $2.64/MMBtu yesterday.
  • Henry Hub futures prices: The July 2023 NYMEX contract expired last Wednesday at $2.603/MMBtu. The August 2023 NYMEX contract price decreased to $2.657/MMBtu, down 1 cent from last Wednesday to yesterday. The price of the 12-month strip averaging August 2023 through July 2024 futures contracts climbed 2 cents to $3.209/MMBtu.
  • Select regional spot prices: Natural gas spot prices fell at most major pricing hubs this report week (Wednesday, June 28, to Wednesday, July 5), except in the Northeast. Price changes this week ranged from a 98 cent decrease at SoCal Citygate to an increase of $1.99/MMBtu at Algonquin Citygate.
    • At the Algonquin Citygate, which serves Boston-area consumers, the price increased $1.99 from $5.94/MMBtu last Wednesday to $7.93/MMBtu yesterday. Yesterday, Enbridge Inc. posted a notice of continued planned outages along its Algonquin Gas Transmission (AGT), which have limited natural gas flows into New England since June 23. According to the notice, outages are expected to be largely resolved by July 8. Total consumption of natural gas in all sectors combined in New England was essentially unchanged at an average of 2.0 billion cubic feet per day (Bcf/d) this week, according to data from S&P Global Commodity Insights.
    • Prices at other pricing hubs in the Northeast also increased over the week, but by less than the increase at the Algonquin Citygate. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 21 cents from $1.66/MMBtu last Wednesday to $1.87/MMBtu yesterday. Across the Northeast, natural gas consumption in the electric power sector increased 13% (1.3 Bcf/d) week over week and was particularly notable in New York and New Jersey, where consumption of natural gas in the electric power sector increased 26% (0.6 Bcf/d) week over week, according to data from S&P Global Commodity Insights. In the New York-Central Park Area, temperatures averaged 78°F this week, which is 6°F higher than last week, leading to 93 cooling degree days (CDDs), 13 more than normal. In the Appalachia production region, where outbound flows have been limited by pipeline maintenance, the Tennessee Zone 4 Marcellus spot price decreased 35 cents from $1.27/MMBtu last Wednesday to $0.92/MMBtu yesterday.
    • In the Midwest, prices decreased this week, in line with the Henry Hub, despite higher natural gas consumption week over week. At the Chicago Citygate, the price decreased 8 cents from $2.45/MMBtu last Wednesday to $2.37/MMBtu yesterday, while total consumption in the Midwest increased by 10% (0.9 Bcf/d), led by a 0.6 Bcf/d increase in the electric power sector, according to data from S&P Global Commodity Insights. Temperatures in the Chicago Area averaged 78°F, 3°F higher than normal, resulting in 25 more CDDs than last week and 25 more CDDs than normal.
    • In Texas, pressure on prices was relieved by slightly lower temperatures. At the Houston Ship Channel, the price decreased 7 cents from $2.51/MMBtu last Wednesday to $2.44/MMBtu yesterday. Total consumption of natural gas in all sectors combined in Texas decreased by 1% (0.1 Bcf/d) week over week. In the Dallas-Fort Worth Area, temperatures averaged 87°F, which is nearly 2°F lower than last report week.
    • In California, prices declined week over week but remained elevated compared with other U.S. pricing hubs. The price at SoCal Citygate in Southern California decreased 98 cents from $4.83/MMBtu last Wednesday to $3.85/MMBtu yesterday. Consumption of natural gas in the electric power sector in California increased by 92% (1.0 Bcf/d) week over week, as temperatures increased. In the Riverside Area, inland from Los Angeles, temperatures averaged 77°F, which is 8°F higher than last report week but normal for this time of year. On Saturday, temperatures in the Riverside Area reached a daily high of 97°F. The share of natural gas used for power generation in California increased from 30% last week to 43% this week, while the share of wind, solar, and hydroelectric power generation combined decreased from 57% last week to 45% this 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 18 cents to a weekly average of $12.14/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased 50 cents to a weekly average of $11.22/MMBtu. In the same week last year (week ending July 6, 2022), the prices were $39.01/MMBtu in East Asia and $47.58/MMBtu at TTF.
  • Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 6 cents, averaging $5.70/MMBtu for the week ending July 5. Weekly average ethane prices rose 4%, while natural gas prices at the Houston Ship Channel fell 2%, resulting in an increase of the ethane premium to natural gas by 17% week over week. Ethylene spot prices rose 1%, decreasing the ethylene to ethane premium by 3%. Propane prices fell 2%, while the Brent crude oil price rose 2%, increasing the propane discount relative to crude oil by 7%. Normal butane and isobutane prices each rose 1%, and the natural gasoline price rose 2%.
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Supply and Demand

  • Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 1.4% (1.5 Bcf/d) compared with the previous report week. Dry natural gas production grew by 1.5% (1.5 Bcf/d) week over week to average 101.4 Bcf/d this week, and average net imports from Canada decreased by 0.7% (less than 0.1 Bcf/d) to average 5.8 Bcf/d.
  • Demand: Total U.S. consumption of natural gas rose by 6.6% (4.6 Bcf/d) week over week to average 73.9 Bcf/d, according to data from S&P Global Commodity Insights. Consumption in the electric power sector rose by 11.7% (4.6 Bcf/d) week over week, and in the combined residential and commercial sector, consumption increased by 0.9% (0.1 Bcf/d). Industrial sector consumption decreased by 0.4% (0.1 Bcf/d). Natural gas exports to Mexico decreased by 1.3% (0.1 Bcf/d) to average 6.4 Bcf/d. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.8 Bcf/d, which is 1.3 Bcf/d higher than last week.
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Liquefied Natural Gas (LNG)

  • Pipeline receipts: Overall average natural gas deliveries to U.S. LNG export terminals increased by 11.7% (1.3 Bcf/d) week over week to average 12.8 Bcf/d this report week, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana increased by 24.0% (1.5 Bcf/d) to 7.6 Bcf/d, as planned maintenance at Sabine Pass came to an end. Natural gas deliveries to Sabine Pass have increased steadily from 2.2 Bcf/d on June 22 to 4.4 Bcf/d yesterday. Deliveries to terminals in South Texas decreased by 2.6% (0.1 Bcf/d) to 4.0 Bcf/d week over week, while deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d.
  • Vessels departing U.S. ports: Twenty-seven LNG vessels (eight from Sabine Pass, six from Corpus Christi, four from Freeport, three each from Calcasieu Pass and Cameron, two from Cove Point, and one from Elba Island) with a combined LNG-carrying capacity of 100 Bcf departed the United States between June 29 and July 5, according to shipping data provided by Bloomberg Finance, L.P.
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Rig Count

  • According to Baker Hughes, for the week ending Tuesday, June 27, the natural gas rig count decreased by 6 rigs from a week ago to 124 rigs. The Haynesville dropped six rigs, the Permian dropped one rig, and one rig was added in an unidentified producing basin. The number of oil-directed rigs decreased by 1 rig from a week ago to 545 rigs. The Eagle Ford and Permian each added one rig, the Williston dropped one rig, and two rigs were dropped in unidentified producing basins. The total rig count, which includes 5 miscellaneous rigs, stands at 674, which is 76 fewer rigs than last year at this time.
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Storage

More storage data and analysis can be found on the Natural Gas Storage Dashboard and the Weekly Natural Gas Storage Report.

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See also:

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Monthly average Henry Hub natural gas spot prices (January 2018–June 2023)Data source: Refinitiv Eikon
Monthly U.S. dry natural gas production (January 2018–June 2023)Data source: U.S. Energy Information Administration, Natural Gas Monthly and Short-Term Energy Outlook (STEO) estimates for May–June 2023
Lower 48 weekly working natural gas in underground storage (January 6, 2018–June 23, 2023)Data source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
29-Jun
Fri,
30-Jun
Mon,
3-Jul
Tue,
4-Jul
Wed,
5-Jul
Henry Hub 2.50 2.52 Holiday Holiday 2.64
New York 1.60 1.48 Holiday Holiday 1.87
Chicago 2.41 2.27 Holiday Holiday 2.37
Cal. Comp. Avg.* 3.34 3.21 Holiday Holiday 3.16
Futures ($/MMBtu)
August Contract 2.701 2.798 2.709 Holiday 2.657
September Contract 2.691 2.774 2.702 Holiday 2.643
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Data source: NGI's Daily Gas Price Index
Natural gas futures prices


U.S. natural gas supply - Gas Week: (6/29/23 - 7/5/23)
Average daily values (billion cubic feet)
this week
last week
last year
Marketed production
114.1
112.3
111.1
Dry production
101.4
99.8
98.5
Net Canada imports
5.8
5.9
5.5
LNG pipeline deliveries
0.1
0.1
0.0
Total supply
107.3
105.8
104.0

Data source: S&P Global Commodity Insights
Note: This table reflects any data revisions that may have occurred since the previous week's posting. Liquefied natural gas (LNG) pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (6/29/23 - 7/5/23)
Average daily values (billion cubic feet)
this week
last week
last year
U.S. consumption
74.2
69.6
70.6
    Power
44.0
39.3
40.9
    Industrial
21.3
21.4
21.2
    Residential/commercial
9.0
8.9
8.5
Mexico exports
6.4
6.5
6.0
Pipeline fuel use/losses
7.0
6.8
6.7
LNG pipeline receipts
12.8
11.5
11.1
Total demand
100.5
94.4
94.5

Data source: S&P Global Commodity Insights
Note: This table reflects any data revisions that may have occurred since the previous week's posting. Liquefied natural gas (LNG) pipeline receipts represent pipeline deliveries to LNG export terminals.

Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Tue, June 27, 2023
Change from
 
last week
last year
Oil rigs
545
-0.2%
-8.4%
Natural gas rigs
124
-4.6%
-19.0%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, June 27, 2023
Change from
 
last week
last year
Vertical
18
-5.3%
-28.0%
Horizontal
606
-1.1%
-11.1%
Directional
50
0.0%
16.3%
Data source: Baker Hughes Company


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2023-06-23
2023-06-16
change
East
623
599
24
Midwest
685
658
27
Mountain
 165
 157
8
Pacific
204
191
13
South Central
1,128
1,125
3
Total
2,805
2,729
76
Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report
Note: Totals may not equal sum of components because of independent rounding.
Working gas in underground storage
Historical comparisons
Year ago
(6/23/22)
5-year average
(2018-2022)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
457
36.3
507
22.9
Midwest
531
29.0
570
20.2
Mountain
133
24.1
147
12.2
Pacific
234
-12.8
256
-20.3
South Central
884
27.6
967
16.6
Total
2,239
25.3
2,447
14.6
Data source: U.S. Energy Information Administration Form EIA-912, Weekly Underground Natural Gas Storage Report
Note: Totals may not equal sum of components because of independent rounding.


Temperature – heating & cooling degree days (week ending Jun 29)
 
HDDs
CDDs
Region
Current total
Deviation from normal
Deviation from last year
Current total
Deviation from normal
Deviation from last year
New England
1
-3
-1
38
14
8
Middle Atlantic
2
0
0
41
2
3
E N Central
3
0
-2
40
-4
1
W N Central
1
-4
-2
66
9
9
South Atlantic
0
0
0
84
-2
-3
E S Central
0
0
0
79
-3
-12
W S Central
0
0
0
142
29
15
Mountain
7
-6
1
51
-15
-17
Pacific
9
0
7
8
-23
-55
United States
3
-1
1
60
-1
-8
Data source: National Oceanic and Atmospheric Administration
Note: HDDs=heating degree days; CDDs=cooling degree days

   Average temperature (°F)


   7-day mean ending Jun 29, 2023

Mean Temperature (F) 7-Day Mean ending Jun 29, 2023

        Data source: National Oceanic and Atmospheric Administration

  Deviation between average and normal temperature (°F)


   7-day mean ending Jun 29, 2023

Mean Temperature Anomaly (F) 7-Day Mean ending Jun 29, 2023

        Data source: National Oceanic and Atmospheric Administration

dry shale production

figure data