In the News (EIA):
Market Highlights:
Prices
Henry Hub spot price: The Henry Hub spot price fell 10 cents from $2.03 per million British thermal units (MMBtu) last Wednesday to $1.93/MMBtu yesterday. Henry Hub futures price: The August 2024 NYMEX contract expired Monday at $1.907/MMBtu, down 21 cents from last Wednesday. This settlement price for the August 2024 contract is the lowest since trading of this contract began 12 years ago. The September 2024 NYMEX contract price decreased to $2.036/MMBtu, down 12 cents from last Wednesday to yesterday. The price of the 12-month strip averaging September 2024 through August 2025 futures contracts declined 8 cents to $2.905/MMBtu. Select regional spot prices: Natural gas spot prices rose at most locations this report week (Wednesday, July 24 to Wednesday, July 31). Price changes ranged from a decrease of 65 cents at the Waha Hub to an increase of 55 cents at Algonquin Citygate. Prices in the Northeast rose this report week. At the Algonquin Citygate, which serves Boston-area consumers, the price rose 55 cents from $1.75/MMBtu last Wednesday to $2.30/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 29 cents from $1.51/MMBtu last Wednesday to $1.80/MMBtu yesterday. The price at Eastern Gas South in southwest Pennsylvania, near Appalachian region production activities, rose 11 cents from $1.36/MMBtu last Wednesday to $1.47/MMBtu yesterday. Average temperatures in the Pittsburgh Area increased 3°F from last week to 76°F, resulting in 79 cooling degree days (CDD), an increase of 17 CDDs from last week. Natural gas consumption across the Northeast rose 4% (0.6 billion cubic feet per day [Bcf/d]) this week, according to data from S&P Global Commodity Insights, driven by a 10% (0.5 Bcf/d) increase in power sector consumption in the Appalachia region. Price changes in the West were mixed this report week. The price at PG&E Citygate in Northern California rose 25 cents from $3.50/MMBtu last Wednesday to $3.75/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 7 cents from $2.81/MMBtu last Wednesday to $2.74/MMBtu yesterday. The price at Northwest Sumas on the Canada-Washington border, the main pricing point for natural gas into the Pacific Northwest, fell 40 cents from $2.20/MMBtu last Wednesday to $1.80/MMBtu yesterday. Average temperatures in the Seattle City Area decreased 2°F from last week, resulting in 15 CDDs, down from 29 CDDs during the previous report week. Average temperatures in the Riverside Area, inland from Los Angeles, decreased 4°F this week to 81°F, resulting in 113 CDDs, a decrease of 30 CDDs from last week. Consumption of natural gas in California decreased 10% (0.6 Bcf/d) this report week driven by a decrease of 23% (0.6 Bcf/d) in consumption by the electric power sector, according to data from S&P Global Commodity Insights. PG&E, operator of California Gas Transmission, reports that maintenance on the Redwood Path, which transports natural gas from the Oregon border into Northern California, will reduce capacity by 0.4 Bcf/d beginning on August 1. Price changes in Texas were mixed this report week. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, decreased 65 cents from $0.43/MMBtu to -$0.22/MMBtu yesterday. The Waha Hub traded $2.15 below the Henry Hub price yesterday, compared with last Wednesday when it traded $1.60 below the Henry Hub price. At the Houston Ship Channel, the price rose 10 cents from $1.63/MMBtu last Wednesday to $1.73/MMBtu yesterday. Average temperatures in the Houston Area fell 1°F from last week to 82°F, 4°F below normal. Houston-area temperatures rose throughout the week and averaged 87°F between Monday and Wednesday of this report week. Natural gas consumption in Texas fell 1% (0.2 Bcf/d) compared with last report week; however, feedgas demand from liquefied natural gas (LNG) terminals in Texas rose 57% (1.5 Bcf/d), according to data from S&P Global Commodity Insights (see Liquefied Natural Gas section below).
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 LNG cargoes in East Asia increased 21 cents to a weekly average of $12.35/MMBtu. Natural gas futures for delivery at the Title Transfer Facility (TTF) in the Netherlands increased 43 cents to a weekly average of $10.70/MMBtu. In the same week last year (week ending August 2, 2023), the prices were $10.91/MMBtu in East Asia and $8.92/MMBtu at TTF. Natural gas plant liquids (NGPL) prices: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 25 cents/MMBtu, averaging $6.64/MMBtu for the week ending July 31. Ethane prices fell 22% week over week, while weekly average natural gas prices at the Houston Ship Channel increased 2%, narrowing the ethane premium to natural gas by 69%. The ethylene spot price was relatively unchanged week over week, and the ethylene premium to ethane increased 5%. Propane prices decreased 1%, while Brent crude oil prices decreased 2% week over week, narrowing the propane discount to crude oil by 5% for the week. Normal butane prices were relatively unchanged, isobutane prices rose 2%, and natural gasoline prices fell 2%.
Supply and Demand
Supply: According to data from S&P Global Commodity Insights, the average total supply of natural gas rose by 1.1% (1.2 Bcf/d) compared with the previous report week. Dry natural gas production grew by 0.5% (0.5 Bcf/d) to average 102.4 Bcf/d, the highest level since the week ending March 13, when production averaged 102.1 Bcf/d. Average net imports from Canada increased by 12.0% (0.7 Bcf/d) from last week. Demand: Total U.S. consumption of natural gas rose by 1.5% (1.1 Bcf/d) compared with the previous report week, as warmer-than-normal temperatures in the Northeast and Midwest raised consumption in the electric power sector by 1.3% (0.6 Bcf/d) week over week, according to data from S&P Global Commodity Insights. Industrial sector consumption was essentially unchanged while residential and commercial sector consumption increased by 6.5% (0.5 Bcf/d). Natural gas exports to Mexico decreased 3.2% (0.2 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.9 Bcf/d, or 1.4 Bcf/d higher than last week.
Liquefied Natural Gas (LNG)
Pipeline receipts: Average natural gas deliveries to U.S. LNG export terminals increased 1.4 Bcf/d from last week to 12.9 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana were essentially unchanged at 7.7 Bcf/d, while natural gas deliveries to terminals in South Texas increased 56.6% (1.5 Bcf/d) to 4.1 Bcf/d. Freeport LNG, south of Houston, has restarted all three liquefaction trains on Sunday for the first time since July 7. Natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged from last week at 1.1 Bcf/d. Vessels departing U.S. ports: Twenty-four LNG vessels (seven from Sabine Pass; four each from Cameron, Corpus Christi, and Freeport; three from Calcasieu Pass; and two from Cove Point) with a combined LNG-carrying capacity of 90 Bcf departed the United States between July 25 and July 31, according to shipping data provided by Bloomberg Finance, L.P.
Storage
Net injections into storage totaled 18 Bcf for the week ending July 26, compared with the five-year (2019–2023) average net injections of 33 Bcf and last year’s net injections of 15 Bcf during the same week. Working natural gas stocks totaled 3,249 Bcf, which is 441 Bcf (16%) more than the five-year average and 252 Bcf (8%) 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 20 Bcf to 45 Bcf, with a median estimate of 29 Bcf. The average rate of injections into storage is 16% 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 9.3 Bcf/d for the remainder of the refill season, the total inventory would be 4,153 Bcf on October 31, which is 441 Bcf higher than the five-year average of 3,712 Bcf for that time of year.