Friday, October 30, 2020

EIA Natural Gas Weekly Update

From the Energy Information Administration: 


(For the week ending Wednesday, October 28, 2020)

  • Natural gas spot prices rose at most locations this report week (Wednesday, October 21 to Wednesday, October 28). The Henry Hub spot price rose from $2.86 per million British thermal units (MMBtu) last Wednesday to $3.06/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the November 2020 contract expired yesterday at $2.996/MMBtu, down 3¢/MMBtu from last Wednesday. The December 2020 contract price decreased to $3.291/MMBtu, down 6¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging December 2020 through November 2021 futures contracts declined 3¢/MMBtu to $3.108/MMBtu.
  • The net injections to working gas totaled 29 billion cubic feet (Bcf) for the week ending October 23. Working natural gas stocks totaled 3,955 Bcf, which is 8% more than the year-ago level and 8% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 8¢/MMBtu, averaging $5.15/MMBtu for the week ending October 28. The prices of natural gasoline and ethane fell by 6% and 1%, respectively. The prices of butane and isobutane both rose by 1%. The price of propane remained flat week over week.
  • According to Baker Hughes, for the week ending Tuesday, October 20, the natural gas rig count decreased by 1 to 73. The number of oil-directed rigs rose by 6 to 211. The total rig count increased by 5, and it now stands at 287.

more summary data


Prices rise at most trading hubs outside of California. This report week (Wednesday, October 21 to Wednesday, October 28), the Henry Hub spot price rose 20¢ from a low of $2.86/MMBtu last Wednesday to $3.06/MMBtu yesterday, the highest spot price since March 2019. Temperatures were cooler than normal across most of the Lower 48 states and warmer than normal on the eastern seaboard, especially the Southeast. At the Chicago Citygate, the price increased 32¢ from a low of $2.72/MMBtu last Wednesday to $3.04/MMBtu yesterday.

Hurricane Zeta makes landfall in Louisiana yesterday. Hurricane Zeta made landfall near Cocodrie, Louisiana, yesterday afternoon as a Category 2 storm. Based on operator reports, the Bureau of Safety and Environmental Enforcement (BSEE) estimates that 45% of natural gas production and 67% of oil production in the Gulf of Mexico have been shut-in as of yesterday. High winds cut power to approximately 800,000 customers in Louisiana, Mississippi, and Alabama. More than 80% of customers in New Orleans lost power, according Entergy, the largest utility company.

California prices fall as the West continues to battle wildfires. The price at PG&E Citygate in Northern California fell 15¢, down from a high of $4.26/MMBtu last Wednesday to $4.11/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 72¢ from $4.35/MMBtu last Wednesday to $3.63/MMBtu yesterday. The state continues to battle over a dozen active wildfires, with active blazes also in neighboring western states.

Northeast prices rise with forecasts of cold temperatures. At the Algonquin Citygate, which serves Boston-area consumers, the price went up $3.10 from $1.74/MMBtu last Wednesday to a high of $4.84/MMBtu yesterday, the highest price since January 2020. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased $1.47 from $0.91/MMBtu last Wednesday to a high of $2.38/MMBtu yesterday.

The Tennessee Zone 4 Marcellus spot price increased $1.08 from $0.62/MMBtu last Wednesday to $1.70/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose $1.13 from $0.75/MMBtu last Wednesday to $1.88/MMBtu yesterday.

Permian Basin discount to the Henry Hub narrows considerably. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $0.89/MMBtu last Wednesday, $1.97/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a high of $2.91/MMBtu, 15¢/MMBtu lower than the Henry Hub price. S&P Platts reports that tighter supply and demand balances in the Southeast and cooler-than-normal temperatures in downstream demand markets in the western U.S. could be boosting prices in the Permian Basin.

Supply is down slightly. According to data from IHS Markit, the average total supply of natural gas fell by 0.1% compared with the previous report week. Dry natural gas production decreased by 1.3% compared with the previous report week. Average net imports from Canada averaged 4.6 Bcf/d during the report week, an increase of 31.9% from last week, according to IHS Markit amid heating demand in Midwestern markets.

Demand rises because of cooler temperatures and increased heating demand in buildings. Total U.S. consumption of natural gas rose by 7.0% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation declined by 1.0% week over week. In the residential and commercial sectors, consumption increased by 26.5%, reaching a high of 26.5 Bcf/d on Tuesday, the highest levels since April 2020. Industrial sector consumption increased by 3.2% week over week. Natural gas exports to Mexico decreased 1.9%. Natural gas deliveries to U.S. liquefied natural gas (LNG) export facilities (LNG pipeline receipts) averaged 9.0 Bcf/d, or 1.1 Bcf/d higher than last week.

U.S. LNG exports increase week over week. Sixteen LNG vessels (seven from Sabine Pass, three from Cameron, two each from Freeport and Corpus Christi, and one each from Cove Point and Elba Island) with a combined LNG-carrying capacity of 58 Bcf departed the United States between October 22 and October 28, 2020, according to shipping data provided by Marine Traffic.