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 43 cents from $2.87 per million British thermal units (MMBtu) last Wednesday to $2.44/MMBtu yesterday.
• Henry Hub futures price: The price of the February 2024 NYMEX contract decreased 22.9 cents, from $2.870/MMBtu last Wednesday to $2.641/MMBtu yesterday. The price of the 12-month strip averaging February 2024 through January 2025 futures contracts declined 14.5 cents to $2.815/MMBtu.
• Select regional spot prices: Natural gas spot prices fell at most locations this week (Wednesday, January 17, to Wednesday, January 24). Price changes ranged from a decrease of $10.91/MMBtu at Algonquin Citygate to an increase of $0.19/MMBtu at SoCal Citygate.
• At the Algonquin Citygate, which serves Boston-area consumers, the price went down $10.91 from $13.35/MMBtu last Wednesday to $2.44/MMBtu yesterday, after reaching a weekly high of $14.80/MMBtu last Thursday. In New England, cold weather at the beginning of the report week increased demand for space heating. Natural gas consumption rose 11% (0.4 billion cubic feet per day [Bcf/d]) this week, led by a 13% (0.3 Bcf/d) increase in residential and commercial sector consumption, according to data from S&P Global Commodity Insights. However, average temperatures in the Boston Area proceeded to rise throughout the report week, reaching an average of 36°F yesterday, almost 10°F above the weekly average, resulting in fewer heating degree days (HDD) at the end of the report week. Temperatures rose and prices fell in other areas of the Northeast as well. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price decreased $5.92 from $7.77/ MMBtu last Wednesday to $1.85/MMBtu yesterday, after reaching a weekly high of $12.38/MMBtu last Friday. In markets near Appalachian production activities, the Tennessee Zone 4 Marcellus spot price decreased 77 cents from $2.27/MMBtu last Wednesday to $1.50/MMBtu yesterday, and the price at Eastern Gas South in southwest Pennsylvania fell 69 cents from $2.28/MMBtu last Wednesday to $1.59/MMBtu yesterday.
• In California, the price at PG&E Citygate in Northern California rose 5 cents, up from $3.95/MMBtu last Wednesday to $4.00/MMBtu yesterday. At SoCal Citygate in Southern California, the price increased 18 cents from $3.24/MMBtu last Wednesday to $3.42/MMBtu yesterday. Maintenance on El Paso Natural Gas Company’s North Mainline reduced pipeline capacity for delivery of natural gas westbound out of the Permian production region by approximately 28% (0.4 Bcf/d) this week. In addition, Southern California Gas Company (SoCal Gas) reported maintenance this week in the Blythe/Ehrenberg subzone located within their southern zone, which reduced capacity at the subzone by approximately 46% (0.6 Bcf/d).

In the statement above, the capacity reduction on the SoCalGas system was previously reported as 86%. This statement was corrected on January 26 to reflect a 46% capacity reduction.

• At Northwest Sumas on the Canada-Washington border and the main natural gas pricing point in the Pacific Northwest, the price decreased 64 cents from $3.99/MMBtu last Wednesday to $3.35/MMBtu yesterday. Temperatures in the Seattle City Area averaged 45°F this week, resulting in 141 HDDs, 111 fewer HDDs than last week. Natural gas consumption decreased 31% (1.4 Bcf/d), according to S&P Global Commodity Insights. At the same time, natural gas flows into the Pacific Northwest increased 21% (0.9 Bcf/d) with almost half the volumes coming from Canada.

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 $1.01 to a weekly average of $9.49/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands decreased 71 cents to a weekly average of $8.92/MMBtu. In the same week last year (week ending January 25, 2023), the prices were $22.42/MMBtu in East Asia and $19.67/MMBtu at TTF.
• Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 4 cents/MMBtu, averaging $7.50/MMBtu for the week ending January 24. Weekly average ethane prices fell 15%, while weekly average natural gas prices at the Houston Ship Channel fell 54%. The ethane premium to natural gas rose 199% week over week. The ethylene spot price fell 1%, increasing the ethylene premium to ethane by 8%. The average weekly propane price rose 5%, while the Brent crude oil price rose 2%. The propane discount relative to crude oil decreased 4% week over week. Normal butane prices rose 5%, isobutane prices rose 6%, and natural gasoline prices rose 2%.

Supply and Demand

• Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 4.7% (4.9 Bcf/d) compared with the previous report week. Dry natural gas production increased by 5.0% (4.7 Bcf/d) after falling last week due to production declines caused by the cold weather and averaged 99.9 Bcf/d for the week. Average net imports from Canada increased by 2.8% (0.2 Bcf/d) from last week.
• Demand: Total U.S. consumption of natural gas fell by 7.6% (9.4 Bcf/d) compared with the previous report week, according to data from S&P Global Commodity Insights. Residential and commercial sector consumption decreased by 12.3% (7.2 Bcf/d) week over week. Natural gas consumed for power generation decreased by 3.7% (1.4 Bcf/d), and industrial sector consumption decreased by 3.0% (0.8 Bcf/d). Natural gas exports to Mexico increased 0.2% (less than 0.1 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 13.2 Bcf/d, or 0.7 Bcf/d higher than last week.

Liquefied Natural Gas (LNG)

• Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals increased by 5.6% (0.7 Bcf/d) week over week, averaging 13.2 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana increased by 14.2% (1.1 Bcf/d) to 9.1 Bcf/d, and natural gas deliveries to terminals in South Texas decreased by 11.7% (0.4 Bcf/d) to 3.2 Bcf/d. Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 0.9 Bcf/d.
• Vessels departing U.S. ports: Twenty LNG vessels (seven from Sabine Pass; four from Corpus Christi; three from Cameron; and two each from Cove Point, Calcasieu Pass, and Freeport) with a combined LNG-carrying capacity of 76 Bcf departed the United States between January 18 and January 24, according to shipping data provided by Bloomberg Finance, L.P.

Rig Count

• According to Baker Hughes, for the week ending Tuesday, January 16, the natural gas rig count increased by 3 rigs from a week ago to 120 rigs. The Barnett added one rig, the Marcellus added two rigs, and two rigs were added among unidentified producing regions, while the Haynesville and the Permian each dropped one rig. The number of oil-directed rigs decreased by 2 rigs from a week ago to 497 rigs. The Cana Woodford and the Mississippian each added one rig, the Barnett and the Permian each dropped one rig, and two rigs were dropped among unidentified producing regions. The total rig count, which includes 3 miscellaneous rigs, now stands at 620 rigs.

Storage

• Net withdrawals from storage totaled 326 Bcf for the week ending January 19, compared with the five-year (2019–2023) average net withdrawals of 148 Bcf and last year's net withdrawals of 86 Bcf during the same week. This is the third-largest withdrawal on record. Working natural gas stocks totaled 2,856 Bcf, which is 142 Bcf (5%) more than the five-year average and 110 Bcf (4%) 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 295 Bcf to 376 Bcf, with a median estimate of 328 Bcf.
• The average rate of withdrawals from storage is 4% higher 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 15.0 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,775 Bcf on March 31, which is 142 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