Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price rose 10 cents from $2.51 per million British thermal units (MMBtu) last Wednesday to $2.61/MMBtu yesterday.
• Henry Hub futures prices: The price of the August 2023 NYMEX contract increased 6.2 cents, from $2.603/MMBtu last Wednesday to $2.665/MMBtu yesterday. The price of the 12-month strip averaging August 2023 through July 2024 futures contracts climbed 11.8 cents to $3.259/MMBtu.
• Select regional spot prices: Natural gas spot prices rose at most major pricing hubs this report week (Wednesday, July 19, to Wednesday, July 26), except at a few locations in Appalachia and the Pacific Northwest. Price changes this week ranged from a decrease of $0.27/MMBtu at Tennessee Zone 4 Marcellus to an increase of $6.69/MMBtu at SoCal Citygate.
• Despite decreased weekly average consumption of natural gas and slightly higher production across the area, prices generally increased in the Northeast this report week, though some prices decreased in the Appalachia producing region. In New England, at the Algonquin Citygate, which serves Boston-area consumers, the price increased $4.57/MMBtu, from $1.74/MMBtu last Wednesday to $6.31/MMBtu yesterday. On Monday, the price at Algonquin Citygate was $2.21/MMBtu, while on Tuesday it was $4.44/MMBtu. Algonquin Gas Transmission has issued notice of reduced operational capacity across its system, with an increased impact on flows to delivery areas beginning Tuesday, July 25. In New York, at the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 45 cents from $1.65/MMBtu last Wednesday to $2.10/MMBtu yesterday. In Appalachia, the Tennessee Zone 4 Marcellus spot price decreased 27 cents from $1.35/MMBtu last Wednesday to $1.08/MMBtu yesterday. Total consumption of natural gas in all sectors combined in the Northeast decreased 1%, or 0.3 billion cubic feet per day (Bcf/d), week over week, driven mostly by a 2% (0.2 Bcf/d) decline in consumption in the electric power sector, according to data from S&P Global Commodity Insights. However, daily natural gas consumption in all sectors combined in the Northeast has increased 21% since Saturday.
• Across much of the West, prices increased this week, particularly in California. In the Rocky Mountain region, the price at Cheyenne Hub in southeast Wyoming rose 16 cents from $2.24/MMBtu last Wednesday to $2.40/MMBtu yesterday. In California, the price at PG&E Citygate in Northern California rose 40 cents, up from $4.89/MMBtu last Wednesday to $5.29/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $6.69 from $5.64/MMBtu last Wednesday to $12.33/MMBtu yesterday. On Tuesday, SoCalGas issued notice of unplanned maintenance on Line 225, causing the pipeline to be unavailable and reducing operating capacity by 0.7 Bcf/d for the Total Wheeler Ridge Zone. Repairs to the pipeline are expected to last from July 27 through August 11. Total consumption of natural gas in California was essentially unchanged this week, averaging 5.8 Bcf/d, according to data from S&P Global Commodity Insights, as above-normal temperatures persisted this week. In the Riverside Area inland from Los Angeles, temperatures averaged 85°F this week, same as last week, and daily maximum temperatures were at or above 103°F, leading to 139 cooling degree days (CDDs), same as last week and 38 more CDDs than normal. In the Desert Southwest, temperatures in the Phoenix Area also remained high, averaging 105°F, same as last week, with the daily maximum temperature averaging 117°F, leading to 280 CDDs, 4 fewer CDDs than last week and 66 more CDDs than normal.

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 decreased 10 cents to a weekly average of $11.13/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased $1.00 to a weekly average of $9.67/MMBtu. In the same week last year (week ending July 27, 2022), the prices were $39.96/MMBtu in East Asia and $53.64/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 6 cents/MMBtu, averaging $7.10/MMBtu for the week ending July 26. Weekly average ethane prices fell 3%, while natural gas prices at the Houston Ship Channel rose by 5%, resulting in a narrowing of the ethane premium to natural gas by 9% week over week. Despite ethylene spot prices falling 1%, the ethylene to ethane premium increased by 5% due to the lower ethane price. Propane prices rose 4%, while the Brent crude oil price rose 3%, increasing the propane discount relative to crude oil by 2%. The normal butane price rose 3%, the isobutane price fell 4%, and the natural gasoline price rose 4%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.3% (0.4 Bcf/d) week over week. Dry natural gas production grew by 0.3% (0.3 Bcf/d) to average 101.3 Bcf/d, while net imports from Canada were essentially unchanged from last week, averaging 6.1 Bcf/d.
• Demand: Total U.S. consumption of natural gas fell by 0.6% (0.4 Bcf/d) compared with the previous report week to average 75.9 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation declined by 1.2% (0.5 Bcf/d) week over week. In contrast, industrial sector consumption increased by 0.4% (0.1 Bcf/d), and the combined residential and commercial sector consumption increased by 0.4% (less than 0.1 Bcf/d) week over week. Natural gas exports to Mexico decreased 1.0% (0.1 Bcf/d) week over week to average 6.2 Bcf/d. Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.6 Bcf/d, essentially unchanged from last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals were essentially unchanged week over week, averaging 12.6 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Texas decreased by 3.1% (0.1 Bcf/d) to 3.9 Bcf/d, while deliveries to terminals in South Louisiana increased by 2.6% (0.2 Bcf/d) to 7.5 Bcf/d. Natural gas deliveries to terminals outside the Gulf Coast decreased by 6.1% (0.1 Bcf/d), almost entirely due to a decline in deliveries to the Cove Point terminal in Maryland. TC Energy declared a force majeure on its Columbia Gas Transmission pipeline after an explosion occurred at a section of the pipeline near Strasburg, Virginia, on Tuesday, which decreased natural gas flows to the Cove Point LNG terminal.
• Vessels departing U.S. ports: Twenty-four LNG vessels (seven from Sabine Pass, four each from Cameron and Freeport, three each from Calcasieu Pass and Corpus Christi, two from Elba Island, and one from Cove Point) with a combined LNG-carrying capacity of 86 Bcf departed the United States between July 20 and July 26, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, July 18, the natural gas rig count decreased by 2 rigs from a week ago to 131 rigs. The Permian and Haynesville each dropped one rig. The number of oil-directed rigs decreased by 7 rigs from a week ago to 530 rigs. The Permian dropped three rigs, the Eagle Ford dropped 2 rigs, the Granite Wash dropped one rig, and one rig was dropped in an unidentified producing basin. The total rig count, which includes 8 miscellaneous rigs, stands at 669 rigs, 89 fewer rigs than last year at this time.

Storage

• Net injections into storage totaled 16 Bcf for the week ending July 21, compared with the five-year (2018–2022) average net injections of 31 Bcf and last year's net injections of 18 Bcf during the same week. Working natural gas stocks totaled 2,987 Bcf, which is 345 Bcf (13%) more than the five-year average and 573 Bcf (24%) 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 6 Bcf to 31 Bcf, with a median estimate of 14 Bcf.
• The average rate of injections into storage is 4% 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 9.3 Bcf/d for the remainder of the refill season, the total inventory would be 3,940 Bcf on October 31, which is 345 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