Natural gas price movements are mixed. Prices at most market locations moved by 3¢ to 5¢ through the report week, with exceptions in the West, where above-average temperatures raised prices by more than 10¢ at some locations, and in the Northeast, where cooler weather brought double-digit price declines. Prices in the Rockies rose by a nickel or less, while at PG&E Citygate, serving Northern California, prices rose by 16¢, from $3.13/MMBtu last Wednesday to $3.29/MMBtu yesterday. Chicago Citygate spot prices increased by 4¢ Wednesday-to-Wednesday, closing yesterday at $2.79/MMBtu, closely tracking Henry Hub prices, which began the report week at $2.77/MMBtu last Wednesday and settled yesterday at $2.81/MMBtu.
Prices for New York reach record low. In the Northeast and Mid-Atlantic regions, prices fluctuated during the report week in response to varying temperatures and reduced maintenance outages. Prices at the Algonquin Citygate, which serves Boston, started the report week at $1.51/MMBtu, falling with mild temperatures to $1.35/MMBtu on Friday, only to return to $1.51/MMBtu on Monday as temperatures rose. With cooler temperatures, prices at Algonquin closed at $1.23/MMBtu yesterday. Similarly, at Transcontinental Pipeline's Zone 6 New York, the spot price started the report week at $2.54/MMBtu, decreased to $1.48/MMBtu on Friday before rebounding on Monday. Prices settled at that location yesterday at $1.24/MMBtu, a record low. The previous record low occurred in October 2014, when prices were $1.37/MMBtu.
Marcellus-area prices remain low. Marcellus-area prices declined in all trading locations through the week by 10% or more. At Tennessee's Zone 4 Marcellus location, prices fell below $1 from $1.12/MMBtu last Wednesday to97¢/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased from $1.27/MMBtu to $1.06/MMBtu. On the Transcontinental Leidy Line, prices declined by 20¢ through the report week, from $1.21/MMBtu last Wednesday to $1.01/MMBtu yesterday.
Nymex prices increase. The July near-month contract began the week at $2.759/MMBtu last Wednesday and settled at $2.773/MMBtu on Friday when it expired. The August contract started the report week at $2.782/MMBtu last Wednesday, gaining slightly over the report week to end at $2.783/MMBtu yesterday. The 12-month strip (the average of the August 2015 through July 2016 futures contracts) increased slightly from $2.877/MMBtu last Wednesday to $2.890/MMBtu yesterday.
Supply decreases slightly. Dry natural gas production decreased slightly this week by 0.2%, averaging 72.1 billion cubic feet per day (Bcf/d), 4.8% higher than last year's levels, according to Bentek Energy data. Imports of natural gas from Canada decreased by 0.8% overall, with eastern Canada becoming a net importer of natural gas from the U.S. Northeast. LNG sendout was down 17.1% week-over-week, remaining at minimal levels. Total supply decreased for the week by 0.3%.
Decrease in demand in all sectors. U.S. natural gas consumption was down by 3.2% this week, led by reductions in gas demand for the power sector, which was down 5.5% overall. Cooler temperatures in the Southeast, Northeast, and Midwest (three of the higher consuming regions) drove the overall decrease in natural gas for power generation (power burn). Power burn in those regions fell by 17.4%, 11.6%, and 18.2%, respectively. Power burn increased in all other regions, with consumption in the Southwest up by 14.8% because of above-average temperatures, and in the Pacific Northwest, which is continuing at record levels this week of just over 1.0 Bcf/d. This increase, of 12.7% week-over-week and 272% above the same week last year, is due predominantly to low output of hydroelectric generation in the region. The industrial sector was down 0.3% and the residential/commercial sector was down 1.5%. Exports of natural gas to Mexico continued to increase, 4.8% above last week and 44.4% above exports for the same week in 2014.