U.S. Energy Information Administration - EIA - Independent Statistics and Analysis

Natural Gas

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Natural Gas Weekly Update

for week ending March 8, 2017 | Release date: March 9, 2017 | Next release: March 16, 2017 | Previous weeks

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

Republished to correct the supply and demand data attributed to PointLogic in the Prices/Supply/Demand section. The wrong file was used in the original publication.

In the News:

EIA reports the earliest net increase in working gas stocks on record

Working gas stocks rose 7 billion cubic feet (Bcf) in the Lower 48 states for the week ending February 24. This is the earliest that working gas stocks have posted net injections on a national level in the history of the Weekly Natural Gas Storage Report (WNGSR), dating back to 1994. Net injections into working gas storage typically do not occur until March; and prior to this year, the earliest reported net injection reported in the WNGSR occurred for the week ending March 16 (in 2007 and again in 2012). The smallest withdrawal reported in February prior to this year totaled 24 Bcf. The stock rise is attributable to reduced demand due to warmer weather; temperatures have been considerably warmer than normal since the beginning of the new year.

According to the National Oceanic and Atmospheric Administration (NOAA), temperatures during February 2017 were the second warmest in the 123-year period of record, and the warmest since 1954. On average, temperatures were 10° F warmer than normal throughout the Lower 48 states for the week ending February 24. Heating degree-days (HDD), a measurement derived from weather temperature data to represent space heating needs for buildings, were 41% below normal during the week ending February 24. This pattern prevailed throughout the Lower 48 states, outside of the Pacific region, and was especially pronounced in key natural gas demand areas of the East and Midwest, where HDD were 26% and 55% below normal, respectively. In addition, HDD in southern regions of the country, including the East and West South Central, and South Atlantic census divisions were 48% below normal. These declines in space heating requirements resulted in significant drops in natural gas consumption.

Residential/commercial consumption of natural gas during the storage week fell from 32 Bcf/d to 22 Bcf/d, a decline of about 31% from the preceding week, according to estimates from PointLogic Energy. Although less so, industrial consumption fell 1 Bcf/d, and electric power consumption dropped 0.4 Bcf/d on the week. Meanwhile, U.S. natural gas exports held steady on the week, as increased flows of natural gas to the liquefaction facility at Sabine Pass in Louisana offset modest declines in pipeline flows to Mexico. Despite the declines in natural gas consumption, dry natural gas production held steady compared to the previous week.

Excess natural gas supplies resulted in reduced withdrawals at some facilities and increased injections in others during the week. The South Central region posted its first reported net injection this early in the year in the five-region weekly working gas storage history, dating back to 2010. Net injections at nonsalt natural gas storage facilities totaled a record 16 Bcf on the week. At the same time, both the East and Midwest regions reported their smallest net withdrawals ever reported during the first two months of the year.

Overview:

(For the Week Ending Wednesday, March 8, 2017)

Natural gas spot prices rose at most locations this report week (Wednesday, March 1 to Wednesday, March 8). The Henry Hub spot price rose from $2.60 per million British thermal units (MMBtu) last Wednesday to $2.69/MMBtu yesterday.
At the New York Mercantile Exchange (Nymex), the April 2017 contract rose 10¢ from $2.799/MMBtu last Wednesday to $2.901/MMBtu yesterday.
Net withdrawals from working gas totaled 68 billion cubic feet (Bcf) for the week ending March 3. Working natural gas stocks are 2,295 Bcf, which is 8% less than the year-ago level and 19% greater than the five-year (2012–16) average for this week.
The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 57¢, closing at $6.23/MMBtu for the week ending March 3. The price of ethane, propane, butane, and isobutane fell by 9%, 11%, 15%, and 9%, respectively. The price of natural gasoline rose by 2%.
According to Baker Hughes, for the week ending Friday, March 3, the natural gas rig count decreased by 5 to 146. The number of oil-directed rigs rose by 7 to 609. The total rig count increased by 2, and it now stands at 756.

more summary data

Prices/Supply/Demand:

Prices up at most locations. Although temperatures in the Southeast and along the Gulf Coast ended the report week (Wednesday, March 1 to Wednesday, March 8) somewhat colder, they were still well above seasonal norms. Henry Hub spot price rose 9¢ from $2.60/MMBtu last Wednesday to $2.69/MMBtu yesterday.

At the Chicago Citygate, prices increased 12¢ to $2.80/MMBtu yesterday. Prices at PG&E Citygate in Northern California gained 8¢ to $3.15/MMBtu yesterday. The price at SoCal Citygate rose 7¢ to $2.90/MMBtu yesterday.

Last year at this time, the Henry Hub price hit near record lows. On Friday, March 4, 2016, the Henry Hub price fell to $1.49/MMBtu, the lowest nominal price since 1998. At that time, natural gas storage stocks were high because of mild winter weather and high levels of production, and the storage season ultimately ended with record high stocks.

Northeast prices mostly rise. In the Northeast, temperatures ended the report week down somewhat after hitting a low for the report period on Saturday. However, price movements at the Algonquin Citygate, which serves Boston-area consumers, did not closely track weather, as the price fell 26¢ from $3.24/MMBtu last Wednesday to $2.98/MMBtu yesterday. In contrast, prices at the Transcontinental Pipeline Zone 6 trading point for New York increased 14¢ from last Wednesday to close at $2.50/MMBtu yesterday.

Tennessee Zone 4 Marcellus spot prices advanced 24¢ to $2.25/MMBtu yesterday. Prices at Dominion South in northwest Pennsylvania rose 17¢ to $2.38/MMBtu yesterday.

On Friday, FERC granted approval for construction of the Rover Pipeline, which will transport about 3.25 Bcf/d of Marcellus gas into the Midwest and Canada. This project is one of several recent projects that FERC certificated in early 2017 before losing quorum. FERC currently does not have quorum and is unable to certificate additional projects.

April Nymex price up. At the New York Mercantile Exchange (Nymex), the April 2017 contract rose 10¢ from $2.799/MMBtu last Wednesday to $2.901/MMBtu yesterday. The price of the 12-month strip, which averages April 2017 through March 2018 futures contracts, climbed 5¢ to $3.185/MMBtu.

Supply remains flat. According to data from PointLogic, the average total supply of natural gas remained the same as the previous report week, averaging 75.9 Bcf/d. Dry natural gas production remained constant week over week. Average net imports from Canada increased by 12% from last week.

Demand rises. Total U.S. consumption of natural gas rose by 4% compared with the previous report week, according to data from PointLogic. Power burn declined by 2% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 11%. Natural gas exports to Mexico were the same as last week, averaging 3.9 Bcf/d.

U.S. LNG exports. Natural gas pipeline deliveries to the Sabine Pass liquefaction terminal averaged 1.2 Bcf/d for the report week, 23% lower than in the previous week. One vessel (LNG-carrying capacity of 3.4 Bcf) departed Sabine Pass last week, and one vessel (LNG-carrying capacity of 3.6 Bcf) is currently loading at the terminal.

more price data

Storage:

Unseasonably mild temperatures continued this week, resulting in below-normal withdrawals from working gas storage. Net withdrawals from storage totaled 68 Bcf, compared with the five-year (2012–16) average net withdrawal of 136 Bcf and last year's net withdrawals of 63 Bcf during the same week. Warmer temperatures throughout the week for most of the Lower 48 states contributed to decreased heating demand for natural gas compared with normal levels and lower withdrawals from storage. Working gas stocks totaled 2,295 Bcf, which is 363 Bcf more than the five-year average and 192 Bcf less than last year at this time.

EIA reports that reclassifications from working gas to base gas totaled 4 Bcf. The weekly net withdrawals of 68 Bcf include the effects of inventory adjustments of 4 Bcf from working gas to base gas. Excluding the effects of these non-flow-related inventory adjustments implies that flows of natural gas out of storage facilities totaled 64 Bcf.

Working gas continues to increase relative to the five-year average.Working gas stocks increased compared with the five-year average for the sixth time in the past seven weeks. All regions in the Lower 48 states except for the Pacific region are now above the five-year average. In the South Central salt region, the surplus relative to the five-year average totaled 149 Bcf. The Midwest region has the next largest surplus at 138 Bcf. The Pacific region is 26 Bcf below the five-year average. However, the deficits in this region have declined in recent weeks.

Working gas stocks on pace to end the 2016–17 heating season above 2,100 Bcf. If working gas stock changes follow the five-year average for the remainder of the heating season, they will total 2,151 Bcf on March 31. So far in 2017, net withdrawals are 30% below the five-average. Following this slower-than-normal pace, working gas stocks may total 2,193 Bcf by the end of the heating season, which would mark the third time since 2011 that working gas stocks ended the heating season above 2,000 Bcf. Working gas levels topped this threshold at the end of the heating season only two other times, in 2012 and 2016, when working gas totaled 2,473 Bcf and 2,470 Bcf, respectively. Both of these heating seasons were characterized by warmer-than-normal temperatures and relatively light heating demand for natural gas.

Withdrawals are close to the range of market expectations. According to the Bloomberg survey of natural gas analysts, estimates of net withdrawals from natural gas storage ranged from 51 Bcf to 66 Bcf, with a median withdrawal of 63 Bcf. The price of the Nymex futures contract for April 2017 delivery at Henry Hub increased 3¢/MMBtu to $2.97/MMBtu in 721 trades at the release of the WNGSR. Prices drifted down somewhat in subsequent trading, reaching $2.96/MMBtu within two minutes of the WNGSR release.

Temperatures remain unseasonably mild throughout most of the Lower 48 states. Temperatures in the Lower 48 states averaged 46°F, 6°F higher than the normal and 1°F higher than last year at this time. The warmer-than-normal temperatures prevailed throughout most of the Lower 48 states, with the exception of the Pacific and Mountain Census divisions. Temperatures in the Pacific Census division averaged 45°F, 6°F lower than the normal and 14°F lower than last year at this time. Temperatures in the Mountain census region averaged 34°F, 5°F lower than the normal and 12°F lower than last year at this time. Despite the warmer-than-normal temperatures this week, overall temperature were cooler than levels reported last week.

more storage data

Spot Prices ($/MMBtu)	Thu, 02-Mar	Fri, 03-Mar	Mon, 06-Mar	Tue, 07-Mar	Wed, 08-Mar
Henry Hub	2.59	2.51	2.68	2.58	2.69
New York	2.65	3.23	2.24	2.27	2.50
Chicago	2.65	2.66	2.76	2.70	2.80
Cal. Comp. Avg.*	2.66	2.66	2.77	2.67	2.78
Futures ($/MMBtu)
April contract	2.804	2.827	2.901	2.824	2.901
May Contract	2.914	2.939	2.984	2.921	2.981
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index

U.S. natural gas supply - Gas Week: (3/2/17 - 3/8/17)
	Average daily values (Bcf/d):
	this week	last week	last year
Marketed production	79.1	79.4	82.2
Dry production	70.5	70.8	73.6
Net Canada imports	5.4	4.8	5.2
LNG pipeline deliveries	0.0	0.1	0.2
Total supply	75.9	75.6	79.0
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: (3/2/17 - 3/8/17)
	Average daily values (Bcf/d):
	this week	last week	last year
U.S. consumption	73.2	70.6	78.2
Power	21.7	22.3	24.7
Industrial	21.8	21.5	22.0
Residential/commercial	29.7	26.8	31.5
Mexico exports	3.9	3.9	3.4
Pipeline fuel use/losses	6.4	5.6	6.9
LNG pipeline receipts	1.2	1.5	0.0
Total demand	84.7	81.6	88.5
Source: OPIS PointLogic Energy, an IHS Company Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

Rigs
	Fri, March 03, 2017	Change from
	Fri, March 03, 2017	last week	last year
Oil rigs	609	1.2%	55.4%
Natural gas rigs	146	-3.3%	50.5%
Miscellaneous	1	0.0%	0.0%

Rig numbers by type
	Fri, March 03, 2017	Change from
	Fri, March 03, 2017	last week	last year
Vertical	62	1.6%	6.9%
Horizontal	633	1.4%	62.7%
Directional	61	-11.6%	45.2%
Source: Baker Hughes Inc.

Working gas in underground storage
	Stocks billion cubic feet (Bcf)
Region	2017-03-03	2017-02-24	change
East	404	422	-18
Midwest	579	608	-29
Mountain	139	146	-7
Pacific	201	205	-4
South Central	972 C	982	-10
Total	2,295 C	2,363	-68
Source: U.S. Energy Information Administration

Working gas in underground storage
	Historical comparisons
	Year ago (3/3/16)		5-year average (2012-2016)
Region	Stocks (Bcf)	% change	Stocks (Bcf)	% change
East	468	-13.7	395	2.3
Midwest	592	-2.2	441	31.3
Mountain	146	-4.8	126	10.3
Pacific	258	-22.1	227	-11.5
South Central	1,023	-5.0	742	31.0
Total	2,487	-7.7	1,932	18.8
Source: U.S. Energy Information Administration

Temperature – heating & cooling degree days (week ending Mar 02)
		HDD deviation from:			CDD deviation from:
Region	HDD Current	normal	last year	CDD Current	normal	last year
New England	128	-108	-47	0	0	0
Middle Atlantic	121	-102	-51	0	0	0
E N Central	175	-62	-23	0	0	0
W N Central	221	-17	25	0	0	0
South Atlantic	73	-67	-43	16	7	12
E S Central	85	-50	-37	4	1	4
W S Central	56	-31	-21	15	8	10
Mountain	220	39	83	0	-1	-3
Pacific	137	40	92	0	-1	0
United States	140	-38	1	5	2	3
Note: HDD = heating degree day; CDD = cooling degree day Source: National Oceanic and Atmospheric Administration