Friday, May 19, 2017

Natural Gas: EIA Weekly Supply/Demand Report

From the Energy Information Agency:
Price movements mixed. This report week (Wednesday, May 10 to Wednesday, May 17), the Henry Hub spot price rose 5¢ from $3.11/MMBtu last Wednesday to $3.16/MMBtu yesterday. At the Chicago Citygate, prices decreased 3¢ from $3.08/MMBtu last Wednesday to $3.05/MMBtu yesterday. Prices at PG&E Citygate in Northern California decreased 7¢, down from $3.42/MMBtu last Wednesday to $3.35/MMBtu yesterday. The price at SoCal Citygate decreased 6¢ from $3.23/MMBtu last Wednesday to $3.17/MMBtu yesterday.

Algonquin prices rose significantly. At the Algonquin Citygate, which serves Boston-area consumers, prices rose $1.00 from $3.17/MMBtu last Wednesday to $4.17/MMBtu yesterday, as hot weather affected power demand. Spot prices in Boston may also have been influenced by a capacity reduction at Algonquin's Burrillville Compressor Station in Rhode Island. The Transcontinental Pipeline Zone 6 trading point for New York saw prices increase 20¢ from $2.98/MMBtu last Wednesday to $3.18/MMBtu yesterday.

The Marcellus area did not see the same price increases as Boston and New York City. Tennessee Zone 4 Marcellus spot prices decreased 6¢ from $2.74/MMBtu last Wednesday to $2.68/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania fell 11¢ from $2.88/MMBtu last Wednesday to $2.77/MMBtu yesterday.

June Nymex contract falls. At the Nymex, the price of the June 2017 contract decreased 10¢, from $3.292/MMBtu last Wednesday to $3.192/MMBtu yesterday. The price of the 12-month strip averaging June 2017 through May 2018 futures contracts declined 7¢ to $3.309/MMBtu.
Supply decreases. According to data from PointLogic, the average total supply of natural gas fell by 1% compared with the previous week. Dry natural gas production remained constant week over week. Average net imports from Canada decreased by 9% from last week.

Demand falls. Total U.S. consumption of natural gas fell by 1% compared with the previous report week, according to data from PointLogic. Warmer temperatures in the East influenced a 10% increase in power burn. Residential and commercial consumption fell by 16%. Industrial sector consumption decreased by 2% week over week. Natural gas exports to Mexico increased 5%....

Smaller-than-average net injections into working gas storage reported in most regions of the Lower 48 states. Net injections into storage totaled 68 Bcf, compared with the five-year (2012–16) average net injection of 87 Bcf and last year's net injections of 71 Bcf during the same week. By far, the largest shortfalls in net injections, compared with the five-year average, occurred in the East and Midwest regions where continued cooler-than-normal temperatures likely contributed to increased heating demand for natural gas. The East and Midwest regions reported net injections that were 11 Bcf and 9 Bcf below the five-year average, respectively. The Mountain and South Central nonsalt regions were the only ones that posted net injections topping their respective five-year averages, with the Mountain region bettering its five-year average by 3 Bcf and the South Central nonsalt region 2 Bcf above its five-year average. However, total net injections in the South Central region were still 1 Bcf lower than the five-year average....

After the algo's did their now familiar gyration after yesterday's storage report we are net/net back to the same place and going into the cooling season demand will matter more than supply.
$3.2040 up 0.0220, last. The last two weeks action via FinViz: