Friday, July 31, 2020

EIA Natural Gas Weekly Update: Meh, With An Upward Bias

The most important paragraph of the entire report:
....According to Baker Hughes, for the week ending Tuesday, July 21, the natural gas rig count decreased by 3 to 68, the lowest level on record. The number of oil-directed rigs rose by 1 to 181. The total rig count decreased by 2, and it now stands at 251....
From the Energy Information Administration:
for week ending July 29, 2020   |  Release date:  July 30, 2020

.... Prices/Supply/Demand:
Prices rise at most locations. This report week (Wednesday, July 22 to Wednesday, July 29), the Henry Hub spot price rose 11¢ from a low of $1.64/MMBtu last Wednesday to $1.75/MMBtu yesterday. Temperatures were generally close to normal across the Lower 48 states, with warmer-than-normal temperatures across the eastern seaboard and upper Midwest. At the Chicago Citygate, the price increased 18¢ from a low of $1.61/MMBtu last Wednesday to a high of $1.79/MMBtu yesterday.
California prices are up. The price at PG&E Citygate in Northern California rose 21¢, up from $2.38/MMBtu last Wednesday to a high of $2.59/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 84¢ from $1.76/MMBtu last Wednesday to $2.60/MMBtu yesterday. Genscape reports that on Tuesday SoCalGas began storage withdrawal restrictions at the Honor Rancho storage field. Genscape expects the withdrawal restrictions to last until September 19.
Northeast prices increase. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 15¢ from $1.59/MMBtu last Wednesday to $1.74/MMBtu yesterday as New England experienced warmer-than-normal temperatures during the week. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 4¢ from $1.76/MMBtu last Wednesday to $1.80/MMBtu yesterday.
The Tennessee Zone 4 Marcellus spot price increased 5¢ from $1.15/MMBtu last Wednesday to $1.20/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose 6¢ from $1.24/MMBtu last Wednesday to $1.30/MMBtu yesterday.
Permian Basin discount to the Henry Hub stays relatively flat. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $1.22/MMBtu last Wednesday, 42¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a high of $1.32/MMBtu, 43¢/MMBtu lower than the Henry Hub price. On Monday, the price at the Waha Hub reached as low as $1.04/MMBtu as Hurricane Hanna made landfall over southern Texas on Saturday, bringing cooler air into the region that lowered power demand over the weekend. In addition, AEP Texas, one of the state’s largest electricity providers, reported nearly 200,000 customers were without power after the storm on Sunday morning, although power had been restored to most customers by Wednesday.
U.S. Southeast braces for Tropical Storm Isaias. Tropical Storm Isaias is expected to make landfall in Florida this coming Friday or Saturday. EIA's Energy Disruptions map shows hurricane-related map layers from the National Hurricane Center and EIA's map layers for energy-related infrastructure such as high-voltage transmission lines, power plants, and petroleum bulk terminals.

Supply rises slightly. According to data from IHS Markit, the average total supply of natural gas rose by 0.1% compared with the previous report week. Dry natural gas production grew by 0.2% compared with the previous report week. Average net imports from Canada decreased by 2.1% from last week.

Demand rises across all domestic sectors, with power generation reaching a summer high. Total U.S. consumption of natural gas rose by 0.9% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation climbed by 0.7% week over week, reaching 43.6 Bcf/d on Monday, the highest level so far in summer 2020. Industrial sector consumption increased by 1.3% week over week. In the residential and commercial sectors, consumption increased by 0.6%. Natural gas exports to Mexico decreased 0.9%.

U.S. LNG exports are flat week over week. Seven liquefied natural gas (LNG) vessels (two each from Cameron and Cove Point and one each from Corpus Christi, Sabine Pass, and Freeport) with a combined LNG-carrying capacity of 25 Bcf departed the United States between July 23 and July 29, 2020, according to shipping data provided by Marine Traffic.....