Friday, March 3, 2017

Natural Gas: EIA Weekly Supply/Demand Report

Front futures 2.8130 up 0.0090.
From the Energy Information Administration:
Prices up across the Lower 48 states. Most price points outside the Northeast saw prices increase by less than 10¢ this report week (Wednesday, February 22 to Wednesday, March 1). The Henry Hub spot price rose 7¢ from $2.53/MMBtu last Wednesday to $2.60/MMBtu yesterday. At the Chicago Citygate, prices increased 9¢ from $2.59/MMBtu last Wednesday to $2.68/MMBtu yesterday. Prices at PG&E Citygate in Northern California rose 1¢, up from $3.06/MMBtu last Wednesday to $3.07/MMBtu yesterday. The price at SoCal Citygate also rose 1¢, up from $2.82/MMBtu last Wednesday to $2.83/MMBtu yesterday.

Northeast prices see largest rises. At the Algonquin Citygate, which serves Boston-area consumers, prices went up $1.05 from $2.19/MMBtu last Wednesday to $3.24/MMBtu yesterday. This rise occurred yesterday, as weather forecasts predicted cooler weather in the Northeast. From last Wednesday to Tuesday, Algonquin prices were more stable and averaged $2.18/MMBtu.
At the Transcontinental Pipeline Zone 6 trading point for New York, prices increased 26¢ from $2.10/MMBtu last Wednesday to $2.36/MMBtu yesterday. Tennessee Zone 4 Marcellus spot prices advanced 8¢ from $1.93/MMBtu last Wednesday to $2.01/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania rose 13¢ from $2.08/MMBtu last Wednesday to $2.21/MMBtu yesterday. Similar to changes at Algonquin Citygate, these increases occurred primarily during yesterday’s trading.

March contract expires; April contract rises slightly. At the Nymex, the March 2017 contract expired Friday at $2.627/MMBtu, up 4¢ from last Wednesday. The April 2017 contract increased to $2.799/MMBtu, up 10¢ from last Wednesday to yesterday. The price of the 12-month strip averaging April 2017 through March 2018 futures contracts climbed 14¢ to $3.140/MMBtu.

Supply falls slightly. According to data from PointLogic, the average total supply of natural gas decreased by 1% from the previous week. The supply decrease was driven by a decrease in net imports from Canada, which were 15% below the previous week. Dry natural gas production remained constant week over week. More broadly, in December 2016, production decreased year to year from the same month in 2015, and annual production for 2016 was down 2.2% from 2015 levels.

Demand increases. After falling for the past three weeks, total U.S. consumption of natural gas increased 8% this report week over the previous week, according to data from PointLogic. Power burn climbed by 9%, industrial sector consumption increased by 2%, and residential and commercial consumption increased by 12%. Natural gas exports to Mexico decreased 2% week over week.
U.S. LNG exports. Natural gas pipeline deliveries to the Sabine Pass liquefaction terminal averaged 1.5 Bcf/d for the report week, 31% lower than in the previous week. Four vessels (combined LNG-carrying capacity of 14.1 Bcf) departed Sabine Pass last week, and one vessel (LNG-carrying capacity of 3.8 Bcf) is currently loading at the terminal. In February, 15 cargoes were exported from Sabine Pass (carrying an estimated 51.8 Bcf of LNG), matching the previous record of 15 cargoes exported in January, with an estimated LNG export volume of 51.5 Bcf.
more price data

Storage: Continued unseasonably mild temperatures during the week result in weekly net injections for the first time in February. Net injections into storage totaled 7 Bcf, compared with the five-year (2012–16) average net withdrawal of 132 Bcf and last year's net withdrawal of 67 Bcf during the same week. This is the first time that weekly net injections have ever been reported in February on a national level. There have been three other occasions when net injections have been reported during the peak heating demand months (December–February) in the 23-year history of the weekly working gas estimates. All of those occasions occurred in December. The largest net injection during the peak winter months was 27 Bcf, for the week ending December 4, 1998. The other net increases were close to zero—1 Bcf and 2 Bcf, for the weeks ending December 30, 2005 and December 7, 2012, respectively. Warmer temperatures throughout the week for most of the Lower 48 states contributed to decreased heating demand for natural gas and lower withdrawals from storage. Working gas stocks total 2,363 Bcf, which is 295 Bcf more than the five-year average and 187 Bcf less than last year at this time....