Author Name: Today in Energy.
This story was originally published on EIA.GOV[1]

Natural Gas Weekly Update
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Date: None

(For the week ending Wednesday, July 28, 2021)

Natural gas spot price movements were mixed this report week (Wednesday, July 21 to Wednesday, July 28). The Henry Hub spot price rose from $3.91 per million British thermal units (MMBtu) last Wednesday to $4.05/MMBtu yesterday.

The August 2021 NYMEX contract expired yesterday at $4.044/MMBtu, up 8¢/MMBtu from last Wednesday, and topped $4.00/MMBtu for the fourth time this month. The September 2021 NYMEX contract price increased to $3.967/MMBtu, up 3¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging September 2021 through August 2022 futures contracts climbed 6¢/MMBtu to $3.685/MMBtu.

The net injections to working gas totaled 36 billion cubic feet (Bcf) for the week ending July 23. Working natural gas stocks totaled 2,714 Bcf, which is 16% lower than the year-ago level and 6% lower than the five-year (2016–2020) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 21¢/MMBtu, averaging $9.44/MMBtu for the week ending July 28. Ethane prices rose 4%, which was less than the 7% natural gas price increase at the Houston Ship Channel, narrowing the ethane premium to natural gas by 9% on a heat-value parity. Propane prices remained relatively unchanged as strong production was balanced by elevated exports. Normal butane prices rose 4%, and isobutane and natural gasoline prices rose 3%, following the 3% increase in Brent crude oil prices.

According to Baker Hughes, for the week ending Tuesday, July 20, the natural gas rig count remained flat at 104. The number of oil-directed rigs rose by 7 to 387, increasing by 7 the total rig count, which now stands at 491.

more summary data

Gulf Coast prices increase again this week along with increasing consumption in the Southeast. This report week (Wednesday, July 21 to Wednesday, July 28), the Henry Hub spot price rose 14¢ from $3.91/MMBtu last Wednesday to $4.05/MMBtu yesterday. According to data from IHS Markit, consumption of natural gas in the Southeast increased 4.7% driven by a 7.3% increase in the electric power sector.

Heat persists in the West, increasing prices. The price at PG&E Citygate in Northern California rose 19¢, up from $5.36/MMBtu last Wednesday to $5.55/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 79¢ from $7.52/MMBtu last Wednesday to $8.31/MMBtu yesterday. High temperatures and cooling demand persisted in the West this week. Consumption of natural gas in the electric power sector increased in the West 3.5%, according to data from IHS Markit, and the California Independent System Operator (CAISO) issued a Flex Alert for July 28 on expectations of increased electricity demand in Northern California because of high temperatures.

Midwest prices again increase this week. At the Chicago Citygate, the price increased 10¢ from $3.76/MMBtu last Wednesday to $3.86/MMBtu yesterday, following the Henry Hub price which increased 14¢ over the same period.

Mild temperatures and less consumption of natural gas in the electric power sector put downward pressure on prices in the Northeast. At the Algonquin Citygate, which serves Boston-area consumers, the price went down 23¢ from $3.27/MMBtu last Wednesday to $3.04/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price decreased 15¢ from $3.27/MMBtu last Wednesday to $3.12/MMBtu yesterday. Temperatures were mild this week in the Northeast with daily averages ranging from 72°F on Thursday 7/22 to 82°F on Monday 7/26 in Boston. Northeast consumption of natural gas in the electric power sector decreased 3.0% this week, according to data from IHS Markit.

Pipeline constraints lower prices in the Appalachia Basin. The Tennessee Zone 4 Marcellus spot price decreased 18¢ from $2.90/MMBtu last Wednesday to $2.72/MMBtu yesterday. The price at Eastern Gas South in southwest Pennsylvania fell 21¢ from $3.04/MMBtu last Wednesday to $2.83/MMBtu yesterday. Maintenance on the Tennessee Gas pipeline at stations 110 and 204 is scheduled this week and is expected to affect southbound flows of natural gas through Kentucky.

Prices in the Permian Basin increase as pipeline constraints ease. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $3.74/MMBtu last Wednesday, 17¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub increased 18¢ to $3.92/MMBtu, 13¢/MMBtu lower than the Henry Hub price. The force majeure declared on Thursday, July 15, in association with the Waha compressor station on the El Paso pipeline was lifted on Thursday, July 22, relieving constraints on natural gas flows west from the Permian Basin.

U.S. total supply of natural gas rose slightly this week. According to data from IHS Markit, the average total supply of natural gas rose by 0.2% compared with the previous report week. Dry natural gas production decreased by 0.4% compared with the previous report week to average 92.6 billion cubic feet per day (Bcf/d). Average net imports from Canada increased by 11.1%, or 1.0 Bcf/d from last week.

U.S. consumption of natural gas increases driven by the electric power sector. Total U.S. consumption of natural gas rose by 3.6% compared with the previous report week’s increase of 1.5%, according to data from IHS Markit. Natural gas consumed for power generation climbed by 5.8% week over week, or 2.2 Bcf/d, nearly matched by a 5.7% increase, or 0.4 Bcf/d, in consumption in the residential and commercial sectors. U.S. maximum temperatures continued to be higher than normal across parts of the western and northern United States. Industrial sector consumption is the only sector that decreased in the past week, by 1.3%. Natural gas exports to Mexico were the same as last week, averaging 6.3 Bcf/d. Natural gas deliveries to U.S. liquefied natural gas (LNG) export facilities (LNG pipeline receipts) averaged 10.7 Bcf/d, or 0.31 Bcf/d higher than last week.

U.S. LNG exports decrease week over week. Nineteen LNG vessels (seven from Sabine Pass, four from Corpus Christi, three each from Cameron and Freeport, and two from Cove Point) with a combined LNG-carrying capacity of 70 Bcf departed the United States between July 22 and July 28, 2021, according to shipping data provided by Bloomberg Finance, L.P.

The net injections into storage totaled 36 Bcf for the week ending July 23, compared with the five-year (2016–2020) average net injections of 28 Bcf and last year's net injections of 27 Bcf during the same week. Working natural gas stocks totaled 2,714 Bcf, which is 168 Bcf lower than the five-year average and 523 Bcf lower than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 36 Bcf to 52 Bcf, with a median estimate of 40 Bcf.

The average rate of injections into storage is 13% lower than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 8.4 Bcf/d for the remainder of the refill season, the total inventory would be 3,551 Bcf on October 31, which is 168 Bcf lower than the five-year average of 3,719 Bcf for that time of year.

More storage data and analysis can be found on the Natural Gas Storage Dashboard and the Weekly Natural Gas Storage Report.

See also:

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