Friday, June 26, 2015

EIA Weekly Natural Gas Supply/Demand Report

New NYMEX front month, August, $2.798, down 0.068.

From the Energy Information Administration:

...Increase in demand is led by power generation. U.S. gas consumption increased by 2.4% this week, with the largest increase in the power sector, which more than offset declines in residential/commercial and industrial sectors. Consumption of natural gas for power generation (power burn) increased by 6.1% during the report week, 24.2% higher than the same week last year. Power burn reached its highest level this year on Tuesday, increasing to 34.4 Bcf/d.... 
...Prices decline in all market locations. Natural gas prices decreased in all market locations last week, despite above-average temperatures across most of the country. The Henry Hub spot price began the report week at $2.93/MMBtu last Wednesday and settled yesterday at $2.77/MMBtu. Prices at other market locations also declined, with the largest declines in the Northeast. Prices at PG&E Citygate, serving Northern California, declined by 3% from $3.23/MMBtu last Wednesday to $3.13/MMBtu yesterday. Prices at the Chicago Citygate decreased by 5% Wednesday-to-Wednesday, closing yesterday at $2.75/MMBtu.

Northeast prices decline. In the Northeast, prices and consumption in the electric power sector fluctuated during the report week in response to varying temperatures and maintenance outages. Gas prices at the Algonquin Citygate, which serves Boston, started the report week at $2.04/MMBtu amid above-average temperatures, declined by 51¢ by Friday, rebounded to $2.51/MMBtu on Monday as temperatures increased again and settled at $1.51/MMBtu yesterday as the heat receded. Prices at the Algonquin Citygate remain historically low, slightly above an all-time record low level of $1.30/MMBtu in early June, and are $2.40/MMBtu below the weekly average for the same week last year. Similarly, at Transcontinental Pipeline's Zone 6 trading point for New York City delivery, the spot price started the report week at $2.91/MMBtu, decreased slightly by Friday, rebounded on Monday as hotter temperatures returned and settled yesterday at $2.54/MMBtu. Prices at the Tennessee Zone 6 200L serving lower New England, also fluctuated during the report week, starting last Wednesday at $2.06/MMBtu and settling yesterday at $1.65/MMBtu. Multiple maintenance-related outages may have contributed to price fluctuations in the Northeast.

Marcellus prices decline. Already-low Marcellus-area prices declined in all trading locations through the week. At Tennessee’s Zone 4 Marcellus location, prices decreased from $1.22/MMBtu last Wednesday to $1.12/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased by 22%, from $1.62/MMBtu to $1.27/MMBtu. On the Transco Leidy Line, prices declined by 41¢, from $1.62/MMBtu last Wednesday to $1.21/MMBtu yesterday.

Nymex prices decline. At the Nymex, the July contract began the week at $2.855/MMBtu and fell a dime to close at $2.759/MMBtu yesterday. The 12-month strip, which averages the July 2015 through June 2016 Nymex prices, closed at $3.020/MMBtu yesterday, down 6.6¢/MMBtu from the week-ago price.

Production increases despite maintenance-related pipeline outages. Dry natural gas production increased this week by 1.0% and averaged 72.2 billion cubic feet per day (Bcf/d), 5.4% higher than last year's levels, according to Bentek Energy data. Imports of natural gas from Canada increased by 2.4%, led by 3.7% increase in imports to the western part of the country. LNG sendout decreased slightly, and remained at minimal levels. Overall, supply increased by 1.1% week over week and averaged 77.9 Bcf/d....

June 19 
Natural Gas--EIA Weekly Supply/Demand Report: Feel the (Power) Burn