EIA Natural Gas Weekly Update

From the Energy Information Administration:

....In the News:
Natural gas price differentials to Henry Hub narrowed at most hubs in the first half of 2020
The average spot price differentials between regional natural gas hubs and the Henry Hub, also typically known in the natural gas industry as the basis price, have narrowed at many trading hubs in the first half of 2020 compared with the first half of 2019. Natural gas basis reflects the difference between the price of natural gas at the benchmark Henry Hub in Louisiana and the price of natural gas at another delivery point elsewhere in the country. The basis at key demand hubs (near population centers) narrowed primarily because of weather-related factors, and the basis at some supply hubs (near production areas) narrowed because of decreases in natural gas production. Declines in economic activity related to coronavirus disease (COVID-19) and its mitigation efforts generally helped to further narrow the basis at both demand and supply hubs.

Warmer-than-normal temperatures during the 2019–2020 heating season (November 1–March 31) contributed to lower basis prices early in 2020 at key natural gas hubs serving demand markets, such as SoCal Citygate in Southern California; Algonquin Citygate near Boston, Massachusetts; and Transco Zone 5 in Virginia. At Algonquin Citygate, mild winter temperatures in New England contributed to a lower premium to Henry Hub in 2020 compared with past years, with the basis turning negative by March instead of by April or May, which is a more typical basis price seasonal pattern at Algonquin Citygate. Some demand hubs, especially SoCal Citygate and Algonquin Citygate, are often constrained by pipeline infrastructure, which limits the flow of natural gas into the region and leads to wider basis prices....

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Prices/Supply/Demand:
Prices are mixed following Hurricane Laura. This report week (Wednesday, August 26 to Wednesday, September 2), the Henry Hub spot price fell 32¢ from $2.51/MMBtu last Wednesday to a low of $2.19/MMBtu yesterday. Temperatures were warmer than normal in the Southeast and cooler than normal across in the Midwest. At the Chicago Citygate, the price decreased 16¢ from $2.33/MMBtu last Wednesday to $2.17/MMBtu yesterday.

Natural gas demand is down on the Gulf Coast following Hurricane Laura. At the end of the last report week, Hurricane Laura struck the Louisiana-Texas border, home to key energy infrastructure, especially liquefied natural gas (LNG) terminals and natural gas processing plants. Natural gas deliveries to these facilities are down this report week, and it may take weeks to recover to pre-Hurricane levels.

Some of the refineries, industrial plants, and LNG export facilities in the region are still without power. Genscape reports that Motiva Enterprises LLC crude oil refinery and the Natgasoline methanol plant have returned to 50% and 70% of production levels, respectively.....

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....U.S. LNG exports decrease week over week. Six liquefied LNG vessels (three from Corpus Christi, two from Cove Point, and one from Elba Island) with a combined LNG-carrying capacity of 21 Bcf departed the United States between August 27 and September 2, 2020, according to shipping data provided by Marine Traffic.....

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