Natural gas prices were flat or down slightly at most locations. The weather grew increasingly hot through this past Monday in most of the country and production trended down a bit, though prices seemed relatively unresponsive outside of the Northeast. The Henry Hub price fell through Monday and ended the week down 3¢, moving from $2.92/MMBtu last Wednesday to $2.89 yesterday. Prices at most locations mirrored this pattern. Cheyenne Hub in Colorado began the week at $2.82/MMBtu, dipped to $2.70 on Friday, then rebounded to $2.81 yesterday. PG&E Citygate serving Northern California moved from $3.25/MMBtu last Wednesday to $3.16 on Monday, and closed up slightly at $3.27 yesterday.
Northeast prices rise early this week on hot weather but end down.Prices in the Northeast rose throughout the report week as temperatures moved above seasonal norms. Temperatures peaked on Monday, when parts of the region averaged over 80° Fahrenheit for the day. At Algonquin Citygate, serving Boston, prices started the week at $1.98/MMBtu last Wednesday, peaked at $3.91 on Monday, and then settled at $1.74 yesterday. Tennessee Zone 6 200L, supplying lower New England, featured similar price movements to Algonquin, beginning the week at $2.16/MMBtu, peaking at $3.69 on Monday, and closing at $1.73 yesterday. Monday's high levels of home-cooling demand led topower outages for about 19,000 Con Edison customers in New York City.
Marcellus-area prices remain low. Marcellus-area prices increased again this report week, but remain low. Prices at Tennessee Zone 4 Marcellus started the week at 99¢/MMBtu last Wednesday, and rose steadily to close at $1.15 yesterday. On the Transcontinental Leidy Line, prices began at $1.14/MMBtu last Wednesday, peaked at $1.28 on Monday, and finished the report week at $1.18 yesterday.
Nymex prices increase. At the New York Mercantile Exchange (Nymex), the August contract began the week at $2.918/MMBtu last Wednesday and decreased by 2¢ to settle at $2.897 yesterday. To offer some perspective, in 2012, when prices were lower than they had been in over a decade, the average near-month futures price in July was $2.96/MMBtu, slightly higher than yesterday's price. However, the near-month futures price in July of last year was substantially higher than current price levels at $4.02. The 12-month strip (the average of the August 2015 through July 2016 futures contracts) was essentially flat, moving from $3.104/MMBtu last Wednesday to $3.109 yesterday.
Supply decreases slightly. Dry natural gas production averaged 71.8 Bcf/d for the report period, a week-over-week decrease of 0.9%, according to data from Bentek Energy. Production is now 4.0% higher than the same period last year. Imports from Canada were flat this week, and LNG sendout, a minor contributor to supply, was down slightly.
Demand continues to increase, driven by the power sector. U.S. natural gas consumption was up by 1.5% this week, driven by increased power sector demand. The hot summer weather pushed up home-cooling demand, causing power burn to rise by 3.4%, or 1.1 Bcf/d. On Monday, power burn reached 36.6 Bcf/d, yet another high for 2015. The increased power burn levels for the report week were driven largely by increases in the Northeast and the Southwest, where consumption increased by 5.4% and 12.1%, respectively. Consumption was up 0.3% in the industrial sector, but down 1.5% in the residential/commercial sector. Exports to Mexico increased 4.4% week over week, and were 33.6% above 2014 levels.