Natural Gas

Today in Energy

Recent Today in Energy analysis of natural gas markets is available on the EIA website.

Market Highlights:

Prices

• Henry Hub spot price: The Henry Hub spot price fell 36 cents from $3.23 per million British thermal units (MMBtu) last Wednesday to $2.87/MMBtu yesterday. The Henry Hub price reached a high of $13.08/MMBtu on Friday, the highest daily closing price since February 2021, reflecting a run-up in prices observed across the country that day.
• Henry Hub futures price: The price of the February 2024 NYMEX contract decreased 16.9 cents, from $3.039/MMBtu last Wednesday to $2.870/MMBtu yesterday. The price of the 12-month strip averaging February 2024 through January 2025 futures contracts declined 4.8 cents to $2.960/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, January 10, to Wednesday, January 17), after spiking on Friday ahead of the three-day holiday weekend. Prices were high on Friday in anticipation of increased natural gas consumption because of the weather forecast for well-below-normal temperatures for most of the United States over the long weekend. The largest price decreases from Wednesday to Wednesday were in the West, while some prices in the Northeast increased.
• Price movements in the Northeast were mixed this week. At the Algonquin Citygate, which serves Boston-area consumers, the price went up $9.31 from $4.04/MMBtu last Wednesday to $13.35/MMBtu yesterday, after reaching a weekly high of $17.27/MMBtu on Tuesday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased $4.85 from $2.92/MMBtu last Wednesday to $7.77/MMBtu yesterday, after reaching a weekly high of $23.90/MMBtu on Tuesday. Operational Flow Orders were issued by the Tennessee Gas Pipeline Company, LLC, and the Transcontinental Gas Pipeline Company, LLC, ahead of the weekend in anticipation of high consumption of natural gas and to maintain the balance of natural gas deliveries and receipts on the pipeline systems. Constraints persisted through yesterday near the Algonquin Citygate and the Transcontinental Pipeline Zone 6 locations, contributing to prices remaining elevated. Prices at other pricing hubs in the Northeast located near Appalachian production activities decreased this week. The Tennessee Zone 4 Marcellus spot price decreased 34 cents from $2.61/MMBtu last Wednesday to $2.27/MMBtu yesterday, after reaching $7.64/MMBtu on Friday. The price at Eastern Gas South in southwestern Pennsylvania fell 34 cents from $2.62/MMBtu last Wednesday to $2.28/MMBtu yesterday, after reaching $8.97/MMBtu on Friday.
• Prices in the Midwest were flat week over week. At the Chicago Citygate, the price was unchanged from last Wednesday at $2.89/MMBtu, after reaching $25.82/MMBtu on Friday. Consumption of natural gas in the residential and commercial sectors in the Midwest increased 61.4% (6.5 billion cubic feet per day [Bcf/d]) this week, according to data from S&P Global Commodity Insights. Average temperatures in the Chicago Area decreased 21°F this week to an average of 12°F, resulting in 372 heating degree days (HDD), 146 more HDDs than last week and 92 more HDDs than normal. The Chicago Area experienced average temperatures below 0°F on several days this report week. Production of natural gas in the Mid-Continent declined by 19.1% (2.2 Bcf/d), according to data from S&P Global Commodity Insights, also driven by the freezing temperatures.
• Prices in the South followed a similar pattern to most other prices in the country: decreasing week over week after increasing to weekly highs on Friday. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, fell 54 cents this report week, from $2.61/MMBtu last Wednesday to $2.07/MMBtu yesterday, after rising to $8.31/MMBtu on Friday. The price at the Katy Hub, located west of Houston, decreased 40 cents from $2.81/MMBtu to $2.41/MMBtu, after reaching a weekly high of $7.61/MMBtu on Friday. Total consumption of natural gas increased 25.3% (3.1 Bcf/d) in Texas this week, driven by cold temperatures. Average temperatures in the Dallas-Fort Worth Area decreased 14°F this week, resulting in 224 HDDs, 96 more HDDs than last week and 90 more HDDs than normal. Average temperatures were below freezing for several days, which contributed to lower production of natural gas in Texas compared with last week. Natural gas production in West Texas decreased 14.3% (1.7 Bcf/d) this week, according to data from S&P Global Commodity Insights. Average temperatures in the Midland-Odessa Area in West Texas decreased 9°F this week and were below freezing on several days.
• Prices in California decreased by much more than other locations in the United States this week, although they also reached weekly highs on Friday. The price at PG&E Citygate in Northern California fell $3.03, down from $6.98/MMBtu last Wednesday to $3.95/MMBtu yesterday, after reaching $17.01/MMBtu on Friday. The price at SoCal Citygate in Southern California decreased $3.38 from $6.62/MMBtu last Wednesday to $3.24/MMBtu yesterday, after reaching $13.52/MMBtu on Friday. Total consumption of natural gas in California decreased 3.8% (0.2 Bcf/d). Average temperatures in the Riverside Area, inland from Los Angeles, were slightly above last week’s averaging 52°F, an increase of 2°F from last week’s average.

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 fell 93 cents to a weekly average of $10.51/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands decreased 72 cents to a weekly average of $9.62/MMBtu, the first time averaging below $10.00/MMBtu since mid-summer. In the same week last year (week ending January 18, 2023), the prices were $24.85/MMBtu in East Asia and $20.10/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 48 cents/MMBtu, averaging $7.46/MMBtu for the week ending January 17. Weekly average ethane prices rose 1%, while weekly average natural gas prices at the Houston Ship Channel rose 77%. The ethane premium to natural gas fell 196% week over week, the fourth-largest drop by percentage since 2020. The ethylene spot price rose 2%, increasing the ethylene premium to ethane by 2%. The average weekly propane price rose 16%, while the Brent crude oil price rose 3%. The propane discount relative to crude oil decreased 16% week over week. Normal butane prices rose 4%, isobutane prices rose 3%, and natural gasoline prices rose 1%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas fell by 6.2% (6.8 Bcf/d) compared with the previous report week. Dry natural gas production decreased by 7.9% (8.2 Bcf/d) to average 95.6 Bcf/d, and average net imports from Canada increased by 17.5% (1.1 Bcf/d) from last week. The decline in natural gas production was mostly a result of freeze-offs, which occur when water and other liquids in the raw natural gas stream freeze at the wellhead or in natural gas gathering lines near production activities.
• Demand: Total U.S. consumption of natural gas rose by 20.8% (21.3 Bcf/d) to 123.4 Bcf/d compared with the previous report week, according to data from S&P Global Commodity Insights. Natural gas consumption in the residential and commercial, industrial, and electric power sectors combined reached a daily record high of 141.5 Bcf/d on January 16, 2024, according to data from S&P Global Commodity Insights. The increase in consumption was driven by widespread below average temperatures across the United States. Residential and commercial sector consumption increased by 37.0% (15.7 Bcf/d) week over week. Natural gas consumed for power generation rose by 11.0% (3.8 Bcf/d) and industrial sector consumption increased by 6.9% (1.7 Bcf/d). Natural gas exports to Mexico decreased 3.4% (0.2 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.5 Bcf/d, or 2.3 Bcf/d lower than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals decreased by 15.4% (2.3 Bcf/d) week over week, averaging 12.5 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 12.9% (1.2 Bcf/d) to 8.0 Bcf/d. Natural gas deliveries to terminals in South Texas decreased by 18.6% (0.8 Bcf/d) to 3.6 Bcf/d, and natural gas deliveries to terminals outside the Gulf Coast decreased 28.8% (0.3 Bcf/d) to 0.9 Bcf/d.
• Vessels departing U.S. ports: Twenty-seven LNG vessels (eight from Sabine Pass, five from Cameron, four each from Corpus Christi and Freeport, three from Calcasieu Pass, two from Cove Point, and one from Elba Island) with a combined LNG-carrying capacity of 99 Bcf departed the United States between January 11 and January 17, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, January 9, the natural gas rig count decreased by 1 to 117 rigs. The Permian added two rigs, the Utica added one rig, the Eagle Ford and the Marcellus each dropped one rig, and two rigs were dropped among unidentified producing regions. The number of oil-directed rigs fell by 2 to 499 rigs. The Eagle Ford added three rigs and the Williston added two rigs, while the Cana Woodford dropped one rig, the DJ Niobrara dropped two rigs, and the Permian dropped four rigs. The total rig count, which includes 3 miscellaneous rigs, now stands at 619 rigs.

Storage

• Net withdrawals from storage totaled 154 Bcf for the week ending January 12, compared with the five-year (2019–2023) average net withdrawals of 126 Bcf and last year's net withdrawals of 68 Bcf during the same week. Working natural gas stocks totaled 3,182 Bcf, which is 320 Bcf (11%) more than the five-year average and 350 Bcf (12%) 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 withdrawals of 132 Bcf to 176 Bcf, with a median estimate of 163 Bcf.
• The average rate of withdrawals from storage is 19% lower than the five-year average so far in the withdrawal season (November through March). If the rate of withdrawals from storage matched the five-year average of 15.6 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,953 Bcf on March 31, which is 320 Bcf higher than the five-year average of 1,633 Bcf for that time of year.

See also:

• Natural Gas Analysis Reports
• Short-Term Energy Outlook