Friday, September 11, 2015

Natural Gas: EIA Supply/Demand Report

Front (Oct.) futures $2.701 up 1.8 cents.
From the Energy Information Administration:
Prices outside the Northeast remain fairly flat, most varying less than a dime. Temperatures were above average for most of the nation at the start of the report week, then cooled to below average in the western half of the nation by the weekend. The Henry Hub spot price began the report week at $2.71/MMBtu last Wednesday, dipped slightly through the Labor Day holiday, and settled yesterday up 2¢ at $2.73/MMBtu. Prices at other market locations fluctuated slightly. The Chicago Citygate price began the week at $2.79/MMBtu and closed yesterday at $2.75/MMBtu. The Pacific Northwest saw some supply constraints from Canada as a result of maintenance issues, which put minor pressure on prices at Sumas, the U.S./Canada border crossing. The Sumas price closed at $2.55/MMBtu on Wednesday, a gain of 5¢ for the week. Prices at PG&E Citygate, serving Northern California, rose by 9¢ over the report week, closing at $3.19/MMBtu yesterday.

Northeast prices dipped some through the holiday, but rise at the end the report week with maintenance and increased power burn. With moderate temperatures and low holiday weekend demand, Northeast prices fell on Thursday and Friday, but increased with warmer temperatures on Tuesday and Wednesday. Spot prices at the Algonquin Citygate, serving Boston, started the report week at $3.14/MMBtu, fell 15¢ on Friday to $2.99/MMBtu, then increased Tuesday to $3.67/MMBtu, likely because of increasing temperatures and compressor maintenance. Maintenance at the Chaplin and Cromwell stations in Connecticut and at Stony Point in New York may limit capacity along the Algonquin Pipeline by as much as 25%. These maintenance outages are scheduled to continue until the third week in September. Maintenance on Algonquin's Southeast compressor in New York, which began yesterday and is scheduled to end on September 11, will add slightly to these constraints. Algonquin Citygate spot prices ended the week up at $3.71/MMBtu yesterday. Tennessee Zone 6 200L, serving lower New England, followed a similar pattern, beginning the week at $3.12/MMBtu, dipping for the holiday weekend, and ending the week at $3.58/MMBtu. At Transcontinental Pipeline's Zone 6, serving New York City, the spot price started the report week at $2.84/MMBtu, dropped by more than $1 on Friday (to $1.79/MMBtu) for the weekend, and then rose to $2.85/MMBtu on Tuesday, ending the week down at $2.66 yesterday.

Marcellus prices remain low. Natural gas spot prices in the Marcellus region, among the lowest in the country, rose at several trading points this report week. On the Transco Leidy Line, prices started the week at $1.21/MMBtu last Wednesday and remained flat to close at $1.20/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices rose from $1.32/MMBtu last Wednesday to $1.41 yesterday. At Tennessee's Zone 4 Marcellus trading location, prices were flat through the holiday weekend, beginning at $1.04/MMBtu last Wednesday, but rising to end the week at $1.14/MMBtu.

Nymex prices rise slightly. At the New York Mercantile Exchange (Nymex), the October contract began the week at $2.648/MMBtu and ended the report week up slightly, at $2.651 yesterday. The 12-month strip, which is the average of Nymex prices from October 2015 through September 2016 , closed at $2.885/MMBtu yesterday, up 3¢/MMBtu from the week-ago price.
Supply remains flat. Dry natural gas production averaged 72.5 Bcf/d for the report week, 0.2% above that of the previous week, and 4.1% higher than the same period last year, according to Bentek Energy data. On Thursday, September 3, the Northeast had record high dry natural gas production of 20.5 Bcf/d. Imports of natural gas from Canada fell by 6.5%, and liquefied natural gas sendout decreased by 14.4%, averaging less than 0.3 Bcf/d. Overall, supply was down from the previous report week by 0.4%.
Mean Temperature Anomaly (F) 7-Day Mean ending Sep 03, 2015