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Natural Gas Weekly Update

for week ending June 6, 2018   |  Release date:  June 7, 2018   |  Next release:  June 14, 2018   |   Previous weeks


JUMP TO: In The News | Overview | Prices/Supply/Demand | Storage

In the News:

U.S. natural gas exports experience significant year-over-year growth

U.S. exports of natural gas, including exports via pipeline and as liquefied natural gas (LNG), averaged 9.6 billion cubic feet per day (Bcf/d) in the first quarter of this year, according to EIA’s most recent Natural Gas Monthly report. This level of exports is 0.7 Bcf/d (8%) more than in the first quarter of 2017, and 3.8 Bcf/d (66%) more than in the first quarter of 2016.

The United States was a net exporter of natural gas in the first quarter of 2018, with net exports averaging 0.6 Bcf/d. In 2017 as a whole, the United States was a net exporter of natural gas for the first time since 1957. Both LNG exports and pipeline exports have contributed to this shift in natural gas exports.

Since the beginning of 2016, four trains at the Sabine Pass liquefaction terminal in Louisiana have come online (total peak nameplate liquefaction capacity of 2.8 Bcf/d) as has the Cove Point liquefaction terminal in Maryland (0.8 Bcf/d peak nameplate capacity). The amount of U.S. natural gas exported as LNG averaged 2.6 Bcf/d equivalent in the first quarter of 2018, 1.0 Bcf/d (62%) more than in the same period last year. EIA expects the United States to have a total liquefaction capacity of 9.6 Bcf/d by the end of 2020.

U.S. exports to Mexico via pipeline have also been increasing as more infrastructure has been built to transport natural gas both to and within Mexico. Mexico pipeline exports averaged 4.3 Bcf/d in the first three months of 2018, compared to 4.1 Bcf/d in the first three months of 2017, and 3.3 Bcf/d in the first three months of 2016. Exports to Mexico are expected to continue to increase as more natural gas-fired power plants come online in Mexico.

U.S. net natural gas pipeline imports from Canada decreased from 2016 to 2017, in part because of the increasing U.S. exports to Canada, particularly from the U.S. Northeast. This decrease in net imports is expected to continue as the Rover and NEXUS pipelines begin to deliver additional supplies of low-cost natural gas from the Appalachia basin to the markets in the U.S. Midwest and eastern Canada.

EIA projects U.S. natural gas exports will continue growing through 2050 in its Annual Energy Outlook 2018 Reference case, as well as across most side cases.

Overview:

(For the Week Ending Wednesday, June 6, 2018)

  • Natural gas spot price movement varied this report week (Wednesday, May 30 to Wednesday, June 6). The Henry Hub spot price rose from $2.83 per million British thermal units (MMBtu) last Wednesday to $2.85/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the July 2018 contract price rose 1¢ from $2.885/MMBtu last Wednesday to $2.896/MMBtu yesterday.
  • Net injections to working gas totaled 92 billion cubic feet (Bcf) for the week ending June 1. Working natural gas stocks are 1,817 Bcf, which is 31% lower than the year-ago level and 22% lower than the five-year (2013–17) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by $0.23, averaging $8.83/MMBtu for the week ending June 6. The spot prices of natural gasoline, propane, butane, and isobutane fell by 4%, 3%, 1%, and 12%, respectively. The spot price of ethane rose by 8%.
  • According to Baker Hughes, for the week ending Tuesday, May 29, the natural gas rig count decreased by 1 to 197. The number of oil-directed rigs rose by 2 to 861. The total rig count increased by 1, and it now stands at 1060.

more summary data

Prices/Supply/Demand:

Spot price trends are mixed this report week. From Wednesday, May 30 to Wednesday, June 6, the Henry Hub spot price rose 2¢ from $2.83/MMBtu last Wednesday to $2.85/MMBtu yesterday. Weather trended cooler toward the end of the report week, reducing power burn but increasing demand in the residential and commercial sectors. At the Chicago Citygate, prices increased 1¢ from last Wednesday to $2.67/MMBtu yesterday.

Prices at PG&E Citygate in Northern California fell 8¢, down from $3.03/MMBtu last Wednesday to $2.95/MMBtu yesterday. The price at SoCal Citygate decreased 34¢ from $3.16/MMBtu last Wednesday to $2.82/MMBtu yesterday. Prices at SoCal Citygate remain volatile amid ongoing supply constraints.

The difference between prices in the Marcellus basin and prices at northeast demand centers narrows. At the Algonquin Citygate, which serves Boston-area consumers, prices went down 3¢ from $2.54/MMBtu last Wednesday to $2.51/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, prices decreased 5¢ from $2.72/MMBtu last Wednesday to $2.67/MMBtu yesterday.

Several Marcellus region prices, by contrast, rose sharply. Tennessee Zone 4 Marcellus spot prices increased by $1.02 to $2.09/MMBtu yesterday, and the price for the Transco-Leidy Line saw a similar movement. Prices at Dominion South in northwest Pennsylvania fell 4¢ from $2.40/MMBtu last Wednesday to $2.36/MMBtu yesterday. Discounted prices in the region were eased by additional takeaway capacity placed into service on both Rover Mainline B on May 31 and on Transco as additional portions of the Atlantic Sunrise Project came online June 1.

July contract increases slightly. At the Nymex, the price of the July 2018 contract increased 1¢, from $2.885/MMBtu last Wednesday to $2.896/MMBtu yesterday. The price of the 12-month strip averaging July 2018 through June 2019 futures contracts climbed 1¢ to $2.891/MMBtu.

Supply falls slightly. According to data from PointLogic Energy, the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production decreased by 1% compared with the previous report week. Average net imports from Canada decreased by 11% from last week as Rover began deliveries into the Vector pipeline, driving an increase in U.S. exports into Canada over the report week.

Demand ticks up. Total U.S. consumption of natural gas rose by 2% compared with the previous report week, according to data from PointLogic Energy. Natural gas consumed for power generation declined by 1% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 19%, driven by cool temperatures in New England late this report week. Natural gas exports to Mexico decreased 1%.

U.S. LNG exports increase week over week. Six LNG vessels (combined LNG-carrying capacity 21.8 Bcf) departed the United States from May 31 through June 6—four tankers from Sabine Pass liquefaction terminal (combined LNG-carrying capacity 14.9 Bcf) and two tankers from Cove Point terminal (combined LNG-carrying capacity 6.9 Bcf). One tanker (LNG-carrying capacity 3.8 Bcf) was loading at the Sabine Pass terminal on Wednesday.

more price data

Storage:

Net injections fall to lower than the five-year average. Net injections into storage totaled 92 Bcf for the week ending June 1, lower than both the five-year (2013–17) average net injections of 104 Bcf and last year's net injections of 103 Bcf during the same week. Net injections averaged 13.7 Bcf/d; net injections will have to average 12.6 Bcf/d for the remainder of the refill season to match the five-year average level (3,815 Bcf) by October 31. Working gas stocks totaled 1,817 Bcf, which is 512 Bcf lower than the five-year average and 799 Bcf lower than last year at this time.

Despite low storage inventories, the average January 2019 futures contract price trades at a lower premium to the average spot price than last year at this time. During the most recent storage week, the average natural gas spot price at the Henry Hub averaged $2.86/MMBtu, and the Nymex futures price of natural gas for delivery in January 2019 averaged $3.15/MMBtu, 29¢/MMBtu higher than the spot price. A year ago, the January contract was 45¢/MMBtu higher than the spot price.

Reported net injections into storage are within the range of analysts’ expections. According to The Desk survey of natural gas analysts, estimates of the weekly net change from working natural gas storage ranged from net injections of 85 Bcf to 98 Bcf, with a median estimate of 93 Bcf. At the 10:30 a.m. release of the Weekly Natural Gas Storage Report (WNGSR), the price of the Nymex futures contract for July delivery at the Henry Hub increased 1¢/MMBtu to $2.97/MMBtu, with 53 trades executed. Prices vaired in subsequent trading, falling to $2.95 /MMBtu.

Temperatures are in the normal range for the storage week. Temperatures in the Lower 48 states averaged 73 degrees Fahrenheit (°F), 7°F higher than the normal and 7°F higher than last year at this time. Temperatures were 7°F higher than the level reported for the previous week.

more storage data

See also:

Exports/imports


Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
31-May
Fri,
01-Jun
Mon,
04-Jun
Tue,
05-Jun
Wed,
06-Jun
Henry Hub
2.89
2.90
2.91
2.87
2.85
New York
2.97
2.47
2.80
2.63
2.67
Chicago
2.74
2.70
2.73
2.67
2.67
Cal. Comp. Avg.*
2.56
2.65
2.72
2.64
2.62
Futures ($/MMBtu)
July contract
2.952
2.962
2.930
2.890
2.896
August contract
2.965
2.976
2.943
2.907
2.909
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index
Natural gas futures prices
Natural gas liquids spot prices


U.S. natural gas supply - Gas Week: (5/31/18 - 6/6/18)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
89.7
90.5
82.0
Dry production
79.5
80.1
72.5
Net Canada imports
5.7
6.4
5.6
LNG pipeline deliveries
0.1
0.1
0.1
Total supply
85.3
86.6
78.1

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline deliveries represent gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (5/31/18 - 6/6/18)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
57.8
56.6
54.0
    Power
29.5
29.9
26.1
    Industrial
19.7
19.6
19.8
    Residential/commercial
8.5
7.1
8.2
Mexico exports
4.4
4.4
4.0
Pipeline fuel use/losses
6.4
6.4
6.0
LNG pipeline receipts
2.7
2.8
2.2
Total demand
71.3
70.2
66.1

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Tue, May 29, 2018
Change from
 
last week
last year
Oil rigs
861
0.2%
17.5%
Natural gas rigs
197
-0.5%
8.2%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, May 29, 2018
Change from
 
last week
last year
Vertical
66
0.0%
-14.3%
Horizontal
929
0.3%
20.5%
Directional
65
-3.0%
-4.4%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2018-06-01
2018-05-25
change
East
351
328
23
Midwest
341
315
26
Mountain
121
113
8
Pacific
231
221
10
South Central
773
748
25
Total
1,817
1,725
92
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(6/1/17)
5-year average
(2013-2017)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
452
-22.3
460
-23.7
Midwest
610
-44.1
505
-32.5
Mountain
171
-29.2
145
-16.6
Pacific
267
-13.5
279
-17.2
South Central
1,116
-30.7
940
-17.8
Total
2,616
-30.5
2,329
-22.0
Source: U.S. Energy Information Administration


Temperature – heating & cooling degree days (week ending May 31)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
17
-19
-42
15
11
15
Middle Atlantic
2
-25
-26
35
24
35
E N Central
0
-32
-24
79
60
73
W N Central
0
-28
-30
81
56
68
South Atlantic
0
-9
-4
77
23
17
E S Central
0
-9
-6
80
35
34
W S Central
0
-1
-1
116
42
34
Mountain
11
-30
-24
39
7
3
Pacific
27
-1
14
5
-7
1
United States
7
-18
-14
60
28
32
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending May 31, 2018

Mean Temperature (F) 7-Day Mean ending May 31, 2018

Source: NOAA National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending May 31, 2018

Mean Temperature Anomaly (F) 7-Day Mean ending May 31, 2018

Source: NOAA National Weather Service