Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 18 cents from $2.61 per million British thermal units (MMBtu) last Wednesday to $2.43/MMBtu yesterday.
• Henry Hub futures prices: The August 2023 NYMEX contract expired Thursday at $2.492/MMBtu, down 17 cents from last Wednesday. The September 2023 NYMEX contract price decreased to $2.477/MMBtu, down 22 cents from last Wednesday to yesterday. The price of the 12-month strip averaging September 2023 through August 2024 futures contracts declined 16 cents to $3.164/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most major pricing hubs this report week (Wednesday, July 26 to Wednesday, August 2). However, prices remained the same or rose at some locations in the Rockies and the West. Price changes this week ranged from a drop of $4.75/MMBtu at Algonquin Citygate to an increase of $0.16/MMBtu at Malin.
• The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, fell 19 cents this report week, from $2.27/MMBtu last Wednesday to $2.08/MMBtu yesterday. The Waha Hub traded 35 cents below the Henry Hub price yesterday, compared with last Wednesday when it traded 34 cents below the Henry Hub price. Prices were volatile in Texas this week, as pipeline maintenance disrupted natural gas flows from West Texas. Kinder Morgan declared a force majeure on the Permian Highway Pipeline on July 27 after an unspecified incident occurred and pipeline capacity was reduced to zero. The price at the Waha hub decreased to an intraweek low of -$0.52/MMBtu on July 28.
• In the Northeast, prices fell at major pricing hubs as average temperatures fell from recent highs and pipeline capacity increased slightly as a result of completed pipeline maintenance. In New England, at the Algonquin Citygate, which serves Boston-area consumers, the price fell $4.75/MMBtu, from $6.31/MMBtu last Wednesday to $1.56/MMBtu yesterday. The operational capacity reductions on the Algonquin Gas Transmission system eased this week, according to a previously published notice. Temperatures across the region were lower this week, and consumption in the electric power sector declined by 2% (0.3 billion cubic feet per day [Bcf/d]), according to data from S&P Global Commodity Insights. The Boston Area had 8 fewer cooling degree days (CDDs) this week compared with the previous week, totaling 64 CDDs this report week.
• The price at SoCal Citygate in Southern California decreased $3.57 from $12.33/MMBtu last Wednesday to $8.76/MMBtu yesterday. In the area managed by the California Independent System Operator, the share of natural gas use in the electric power sector fell about 4% week over week, while the share of wind, solar, and hydro-generation rose by approximately the same amount, according to our Hourly Electric Grid Monitor. In California, natural gas consumption in the electric power sector fell 9% (0.3 Bcf/d) week over week, according to data from S&P Global, despite continuing high temperatures that resulted in 137 CDDs, or 34 CDDs above normal in the Riverside Area, outside of Los Angeles.

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 decreased 21 cents to a weekly average of $10.91/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands decreased 75 cents to a weekly average of $8.92/MMBtu. In the same week last year (week ending August 3, 2022), the prices were $43.97/MMBtu in East Asia and $59.54/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 7 cents/MMBtu, averaging $7.24/MMBtu for the week ending August 2. Weekly average ethane prices fell 14%, while natural gas prices at the Houston Ship Channel fell by 5%, narrowing the ethane premium to natural gas by 22% week over week. Ethylene spot prices rose 1%, increasing the ethylene to ethane premium by 34%. Propane prices rose 8%, while the Brent crude oil price rose 3%, decreasing the propane discount relative to crude oil by 1%. The normal butane price rose 9%, the isobutane price rose 12%, 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 0.8% (0.9 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.8% (0.8 Bcf/d) to average 102.5 Bcf/d this week, and average net imports from Canada increased by 1.2% (0.1 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas rose by 0.9% (0.7 Bcf/d) compared with the previous report week to average 76.6 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation rose by 1.2% (0.5 Bcf/d) week over week. Industrial sector consumption decreased by 0.3% (0.1 Bcf/d), and residential and commercial sector consumption increased by 2.3% (0.2 Bcf/d). Natural gas exports to Mexico decreased by 2.6% (0.2 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.2 Bcf/d, or 0.3 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals decreased by 2.6% (0.3 Bcf/d) week over week, averaging 12.2 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Texas increased by 1.8% (0.1 Bcf/d) to 4.0 Bcf/d, while deliveries to terminals in South Louisiana decreased by 5.7% (0.4 Bcf/d) to 7.1 Bcf/d. Natural gas deliveries to terminals outside the Gulf Coast increased by 3.0% (less than 0.1 Bcf/d) because of increased deliveries to the Cove Point terminal in Maryland. Effective July 31, TC Energy lifted the force majeure on its Columbia Gas Transmission pipeline, which resulted in last week’s lower natural gas deliveries to Cove Point.
• Vessels departing U.S. ports: Twenty-three LNG vessels (seven from Sabine Pass, five each from Corpus Christi and Freeport, three from Cameron, two from Calcasieu Pass, and one from Cove Point) with a combined LNG-carrying capacity of 85 Bcf departed the United States between July 27 and August 2, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, July 25, the natural gas rig count decreased by 3 rigs from a week ago to 128 rigs. The Marcellus and the Utica each dropped one rig, and one rig was dropped in unidentified producing basins. The number of oil-directed rigs decreased by 1 rig from a week ago to 529 rigs. Two rigs were added in unidentified producing basins, the Permian added one rig, the Eagle Ford dropped two rigs, and the Barnett and the Williston each dropped one rig. The total rig count, which includes 7 miscellaneous rigs, stands at 664 rigs, 103 fewer rigs than last year at this time.

Storage

• Net injections into storage totaled 14 Bcf for the week ending July 28, compared with the five-year (2018–2022) average net injections of 37 Bcf and last year's net injections of 37 Bcf during the same week. Working natural gas stocks totaled 3,001 Bcf, which is 322 Bcf (12%) more than the five-year average and 550 Bcf (22%) 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 24 Bcf, with a median estimate of 16 Bcf.
• The average rate of injections into storage is 2% 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 9.6 Bcf/d for the remainder of the refill season, the total inventory would be 3,917 Bcf on October 31, which is 322 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