Natural Gas

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 6 cents from $2.77 per million British thermal units (MMBtu) last Wednesday to $2.71/MMBtu yesterday.
• Henry Hub futures price: The October 2023 NYMEX contract expired yesterday at $2.764/MMBtu, up 3 cents from last Wednesday. The price of the November 2023 NYMEX contract, which represents the first month of sales of natural gas for winter heating season delivery, decreased to $2.899/MMBtu, down 2 cents from last Wednesday to yesterday. The price of the 12-month strip averaging November 2023 through October 2024 futures contracts declined 1 cent to $3.220/MMBtu.
• Select regional spot prices: Natural gas spot price changes at major pricing hubs were mixed this report week (Wednesday, September 20, to Wednesday, September 27), decreasing at Henry Hub and major hubs west of the Rocky Mountains, but increasing at eastern hubs. Price changes ranged from a decrease of $1.15/MMBtu at SoCal Citygate to an increase of $0.27/MMBtu at Eastern Gas South near Pittsburgh, Pennsylvania.
• Below-average temperatures in the Northeast led to increased demand for space heating while prices also increased this report week. At Algonquin Citygate, which serves Boston-area consumers, the price increased 15 cents from $1.36/MMBtu last Wednesday to $1.51/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price rose 20 cents from $1.08/MMBtu last Wednesday to $1.28/MMBtu yesterday. In the Boston-Area, temperatures averaged 60°F this week, resulting in 34 heating degree days (HDD), 7 more HDDs than normal and 33 more than last week. Temperatures in the New York-Central Park Area averaged 61°F this week, 5°F below normal, resulting in 26 HDDs, 13 HDDs more than normal and 24 more than last week. Natural gas consumption in the residential and commercial sector in the Northeast rose 20% (0.6 billion cubic feet per day [Bcf/d]) this week, according to data from S&P Global Commodity Insights.
• Prices on the West Coast decreased this report week, and prices in all major western markets fell below $3.00/MMBtu, except at PG&E Citygate in Northern California. The price at PG&E Citygate in Northern California fell 29 cents, down from $3.54/MMBtu last Wednesday to $3.25/MMBtu yesterday, and at SoCal Citygate in Southern California, the price decreased $1.15 from $4.13/MMBtu last Wednesday to $2.98/MMBtu yesterday. Temperatures in the Riverside Area, east of Los Angeles, averaged 72°F this week, 3°F below normal, resulting in 48 cooling degree days (CDD), or 20 CDDs below normal. On Wednesday, September 27, the Southern California Gas Company (SoCalGas) shut in the Aliso Canyon storage field for planned maintenance for approximately two weeks, reducing the ability to inject more natural gas into the caverns by 0.4 Bcf/d. Inventories at Aliso Canyon have been building since September 1, following the California Public Utility Commission’s decision on August 31 to increase working natural gas storage capacity at the facility. As of September 26, inventories at Aliso Canyon were about 48.2 billion cubic feet (Bcf), about 19% (7.7 Bcf) more than at the end of August.
• The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, increased 5 cents this report week from $1.76/MMBtu last Wednesday to $1.81/MMBtu yesterday. The Waha Hub traded 90 cents below the Henry Hub price yesterday, compared with last Wednesday when it traded $1.01 below the Henry Hub price. The price rose despite the start of planned maintenance yesterday on the Permian Highway Pipeline (PHP), which delivers natural gas from the Permian production region to the U.S. Gulf Coast. The maintenance will reduce available takeaway capacity on the PHP by 0.3 Bcf/d until Monday, October 2. The price at the Houston Ship Channel increased 5 cents from $2.41/MMBtu last Wednesday to $2.46/MMBtu yesterday. Natural gas consumption in Texas increased 4% (0.5 Bcf/d) week over week, led by a 9% (0.6 Bcf/d) increase in electric power sector consumption, according to data from S&P Global Commodity Insights. Temperatures in the Houston Area averaged 85°F this week, which resulted in 142 CDDs, 25 more CDDs than last week and 47 more than normal.

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 80 cents to a weekly average of $14.63/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased $1.32 to a weekly average of $12.61/MMBtu, the highest weekly average since late April. In the same week last year (week ending September 28, 2022), the prices were $39.77/MMBtu in East Asia and $53.45/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 47 cents/MMBtu, averaging $7.41/MMBtu for the week ending September 27. Weekly average ethane prices fell 11%, while weekly average natural gas prices at the Houston Ship Channel fell 2% week over week, narrowing the ethane premium to natural gas by 21%. Ethylene spot prices remained relatively unchanged, widening the ethylene premium to ethane by 11%. The average weekly propane price fell 6%, while the Brent crude oil price fell 1%. The propane discount relative to crude oil rose 4%. The normal butane price fell 5%, and the isobutane price and natural gasoline price both fell 3%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 0.1% (0.1 Bcf/d) compared with the previous report week. Dry natural gas production remained unchanged at an average 101.2 Bcf/d, and average net imports from Canada increased by 2.0% (0.1 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas rose by 1.3% (0.9 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 1.2% (0.4 Bcf/d) week over week. Industrial sector consumption decreased by 1.0% (0.2 Bcf/d), and residential and commercial sector consumption increased by 7.4% (0.6 Bcf/d). Natural gas exports to Mexico increased by 1.5% (0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 11.8 Bcf/d, or 1.2 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals decreased by 9.1% (1.2 Bcf/d) week over week, averaging 11.8 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 3.2% (0.3 Bcf/d) to 7.8 Bcf/d, while deliveries to terminals in South Texas decreased by 7.4% (0.3 Bcf/d) to 3.7 Bcf/d. Natural gas deliveries to terminals outside the Gulf Coast decreased 67.6% (0.6 Bcf/d) to 0.3 Bcf/d. Natural gas deliveries to the Cove Point LNG terminal in Maryland fell to zero this week because the facility is undergoing annual maintenance.
• Vessels departing U.S. ports: Twenty-one LNG vessels (eight from Sabine Pass; four from Cameron; and three each from Calcasieu Pass, Corpus Christi, and Freeport) with a combined LNG-carrying capacity of 79 Bcf departed the United States between September 21 and September 27, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, September 19, the natural gas rig count decreased by 3 from a week ago to 118 rigs, as the Haynesville dropped 2 rigs and 1 rig was dropped among unidentified producing regions. The number of oil-directed rigs decreased by 8 from a week ago to 507 rigs. The Ardmore Woodford and Granite Wash each added one rig, the Cana Woodford dropped one rig, the Permian dropped five rigs, and four rigs were dropped among unidentified producing regions. The total rig count, which includes 5 miscellaneous rigs, stands at 630 rigs, 134 fewer than last year at this time.

Storage

• Net injections into storage totaled 90 Bcf for the week ending September 22, compared with the five-year (2018–2022) average net injections of 84 Bcf and last year's net injections of 103 Bcf during the same week. Working natural gas stocks totaled 3,359 Bcf, which is 189 Bcf (6%) more than the five-year average and 397 Bcf (13%) 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 84 Bcf to 102 Bcf, with a median estimate of 90 Bcf.
• The average rate of injections into storage is 7% lower 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 10.9 Bcf/d for the remainder of the refill season, the total inventory would be 3,784 Bcf on October 31, which is 189 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