Despite late-season cold weather, prices move down. Cooler temperatures this week had a minimal effect on prices, which moved down at most market locations. The East in particular saw unusually cold weather, stoking gas demand in the residential and commercial sectors, yet prices still declined slightly. Prices at Henry Hub fell a few cents, from $2.60/MMBtu last Wednesday to $2.56/MMBtu yesterday. Even in Chicago, where temperatures fell to freezing for parts of the week, prices at the Chicago Citygate decreased by a dime to $2.57/MMBtu.
Prices in the Northeast remain low. The Northeast, where much of the unseasonably cold spring temperatures occurred, saw across-the-board price decreases for the report week. Prices at the Algonquin Citygate, which serves Boston, fell by more than a dollar over the week, from $3.57/MMBtu last Wednesday to $2.52/MMBtu yesterday, closing a few cents below the Henry Hub price. Transcontinental Zone 6 New York, serving New York City, fell by 15¢ over the week, closing at $2.44/MMBtu yesterday, also below the Henry Hub price. In support of its Leidy Southeast Expansion project, Transcontinental Pipeline issued anotice on April 23 announcing that a segment of the Leidy Line, near Station 505 and Princeton Junction in New Jersey, will be out of service from May 1 through approximately June 12. Bentek Energy estimates that this maintenance could reduce flows through Leidy by 0.8 billion cubic feet per day (Bcf/d) or more on certain days, potentially constraining production in the region.
Prices at most Marcellus trading locations close the week sub-$1.50/MMBtu. At Tennessee's Zone 4 Marcellus trading location, prices opened the week at $1.14/MMBtu last Wednesday, fell to $1.02/MMBtu in trading on Tuesday, and closed the week at to $1.35/MMBtu yesterday. On the Transco Leidy Line, prices were $1.38/MMBtu last Wednesday, fluctuated, and closed at $1.42/MMBtu yesterday. At the Dominion South trading point, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia and Virginia, prices began the report week at $1.69/MMBtu, and fell through Friday to $1.43/MMBtu, eventually closing the week at $1.45/MMBtu yesterday.
Nymex prices down slightly. May's contract opened at $2.606/MMBtu last Wednesday, and ended its tenure as the near-month contract on Tuesday at $2.517/MMBtu, down by nearly a dime. The June 2015 Nymex contract started the week last Wednesday at $2.654/MMBtu, declined during the week, and ended down a nickel, at $2.606/MMBtu, yesterday. The 12-month strip, representing the average of the June 2015 through May 2016 contracts, fell by a few cents over the week, starting last Wednesday at $2.921/MMBtu and closing yesterday at $2.885/MMBtu .
Total supply increases slightly. According to data from Bentek Energy, total supply increased 0.8% week over week, driven by production. Dry natural gas production increased 0.8%, 9.2% greater than the same week last year. Production on Monday reached a record high of 73.7 Bcf. Imports of Canadian natural gas into the United States were up slightly this week, rising 1.4%. Imports to the Northeast were particularly high on Thursday and Friday, when temperatures fell to nearly 30° Fahrenheit in some parts of the region. LNG sendout was down slightly, and volumes remain minimal.
Consumption increases on cold weather. Total natural gas consumption rose by 6.7% week over week, with increased demand in every sector. The residential/commercial sector rose by 18.4% on late-season heating demand from cold weather early in the report week. Industrial consumption was up 2.5%. Natural gas consumption for electric generation increased 0.4% for the week, up by more than 16% over the same period in 2014. Trends were mixed regionally, with the two biggest gas-consuming regions for electric power, the Northeast and the Southeast, up 7.5% and 2.9%, respectively. The Southwest and Texas both consumed less natural gas in this sector during the report week. Exports to Mexico were up 11.9% this week, which is 29.5% higher than this week last year.