Friday, December 16, 2016

Natural Gas: EIA Weekly Supply/Demand Report

With some seriously cold air moving from the Midwest to the Northeast U.S., natural gas is coming off the recent highs:
$3.3850 down .0490.
From the Energy Information Administration:
(For the Week Ending Wednesday, December 14, 2016)
  • Natural gas spot prices fell at most locations this report week (Wednesday, December 7 to Wednesday, December 14). The Henry Hub spot price fell from $3.76 per million British thermal units (MMBtu) last Wednesday to $3.52/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the January 2017 contract price fell 6¢ from $3.603/MMBtu last Wednesday to $3.540/MMBtu yesterday.
  • Net withdrawals from working gas totaled 147 billion cubic feet (Bcf) for the week ending December 9. Working natural gas stocks are 3,806 Bcf, which is 1% less than the year-ago level and 5% greater than the five-year (2011–15) average for this week
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 66¢, closing at $6.72/MMBtu for the week ending December 9. The prices of natural gasoline, ethane, propane, butane, and isobutane all rose, increasing by 5%, 15%, 10%, 12%, and 15%, respectively. These increases may be related to recent strength in crude oil prices.
  • According to Baker Hughes, for the week ending Friday, December 9, the natural gas rig count increased by 6 to 125. The number of oil-directed rigs rose by 21 to 498. The total rig count climbed by 27, and it now stands at 624. Both WTI and Brent Crude spot prices averaged above $50/barrel (b) for this period, compared with the $30-$40/b-range about this time last year. Higher oil prices may be driving increased drilling. 
Prices fall at most locations outside the Northeast. This report week (Wednesday, December 7 to Wednesday, December 14), the Henry Hub spot price fell 24¢, from $3.76/MMBtu last Wednesday to $3.52/MMBtu yesterday. On average this report week, the weather was much colder than last report week, but the last report period ended on a very cold day with elevated prices. Prices generally remained elevated this report period, but fell a bit on Monday.

Early this report week, temperatures fell across the Midwest and Rockies because of polar vortex weather. Low temperatures in the Midwest corresponded to the start of expanded east-to-west capacity on the Tallgrass REX Pipeline. NGI reports that westbound volumes on the REX were about 200 MMcf/d higher this week because of REX's Zone 3 expansion. The expansion project, when fully implemented, will increase REX's capacity by about 800 MMcf/d, bringing total capacity to 2.6 Bcf/d....

...Supply essentially flat. According to data from PointLogic, the average total supply of natural gas rose by 1% compared with the previous week. Dry natural gas production remained flat week over week. Average net imports from Canada increased by 10% from last week, likely in response to cold winter weather.
Demand rises significantly again this week. Total U.S. consumption of natural gas rose by 10% compared with the previous report week, according to data from PointLogic. Power burn climbed by 8% week over week, and consumption in the residential and commercial sectors increased by 17%. Industrial sector consumption remained flat. Natural gas exports to Mexico decreased 6%....