Prices outside the Northeast decline slightly. Natural gas prices decreased in most market locations last week, as late summer heat was replaced by cooler fall weather across most of the country. The Henry Hub spot price began the report week at $2.73/MMBtu last Wednesday and settled yesterday at $2.68/MMBtu. Prices at other locations also declined. In the West, prices at PG&E Citygate, serving Northern California, fell by 2% from $3.19/MMBtu last Wednesday to $3.14/MMBtu yesterday. Prices at the Chicago Citygate declined by 5¢, closing at $2.70/MMBtu yesterday. Cheyenne, in southeast Wyoming, declined by 3¢, to $2.54/MMBtu. Other price points, with the exception of the Northeast, saw similar declines, by less than a dime in most locations.
Northeast prices mixed. In the Northeast, prices fluctuated during the report week in response to varying temperatures. Prices along the Iroquois Gas Transmission pipeline at Waddington and Zone 2 trading points, serving customers from the U.S./Canada border in upstate New York to the interconnection with the Con Edison system in New York City, were the highest in the country, and remained relatively unchanged, closing the report week yesterday at $3.08/MMBtu and $3.15/MMBtu, respectively. In contrast, New England saw large price declines, with gas prices at the Algonquin Citygate, which serves Boston, falling from $3.71/MMBtu last Wednesday to $1.93/MMBtu on Tuesday, and closing the week at $2.57/MMBtu yesterday. Similarly, at the Tennessee Zone 6 200L serving lower New England, prices fluctuated during the report week, starting last Wednesday at $3.58/MMBtu, falling to $1.99/MMBtu on Tuesday, and settling yesterday at $2.60/MMBtu. At Transcontinental Pipeline's Zone 6 trading point for New York City delivery, the spot price fluctuated during the report week, but remained unchanged Wednesday-to-Wednesday, closing at $2.66/MMBtu yesterday.
Most Marcellus prices increase slightly, but remain low. Most Marcellus-area prices increased by around a dime through the report week. At Tennessee's Zone 4 Marcellus location, prices increased from $1.14/MMBtu last Wednesday to $1.24/MMBtu yesterday. On the Transco Leidy Line, prices increased from $1.20/MMBtu last Wednesday to $1.28/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased by 5¢, falling from $1.41/MMBtu to $1.36/MMBtu.
The Ohio Pipeline Energy Network (OPEN) project, designed to transport natural gas from the Marcellus and Utica shale plays to points in the Midwest, Southeast, and the Gulf Coast, was cleared by the Federal Energy Regulatory Commission this week. The project will place in service the Berne and the Tompkinsville compressor stations to enable bi-directional flow on the Texas Eastern pipeline and will add up to 0.55 Bcf/d of additional takeaway capacity. OPEN is one of several projects in the Northeast designed to relieve constraints by adding backhaul capacity to move natural gas production from the Northeast to the Southeast/Gulf region in the next few years. So far, the flows through the Tompkinsville compressor, which averaged 0.67 Bcf/d over the past 30 days, have not increased, according to Bentek Energy data.
Nymex prices increase by a penny. At the Nymex, the October contract began the week at $2.651/MMBtu and ended the report week up slightly, at $2.660/MMBtu yesterday amid forecasts of warmer weather and stronger demand than is typical for this time of year. The 12-month strip, which averages the October 2015 through September 2016 Nymex prices, closed at $2.871/MMBtu yesterday, down slightly from the week-ago price of $2.885/MMBtu.
Supply declines slightly. Dry natural gas production declined by 0.8% this week and averaged 71.9 Bcf/d, 2.9% higher than the level for this week in 2014, according to Bentek Energy data. Imports of natural gas from Canada declined by 10%, led by an 8% decrease in imports to the western part of the country, which is likely related to maintenance outages. LNG sendout declined by 12%, averaging 0.3 Bcf/d, and remained a small contributor to supply. Overall, supply decreased by 1.4% week-over-week.
Consumption decreases. U.S. consumption decreased by 5% overall, compared to the last report week, led by a 15% decline in natural gas used for power generation. The largest week-over-week percent decrease in power burn was in the Midwest, where consumption declined by 53%, followed by declines in the Midcontinent (45%), Texas (15%), and the Southeast (13%). Consumption in the residential/commercial and industrial sectors increased by 11% and 1%, respectively. Exports to Mexico averaged 3.0 Bcf/d, a 1% decrease from the previous week, and 35% higher than exports for the same week last year.