Prices outside the Northeast are fairly flat. The hot summer weather continues for most of the nation. Temperatures increased throughout the report week in the central and eastern parts of the country, although on the West Coast, temperatures moderated. The Henry Hub spot price began the report week at $2.72/MMBtu last Wednesday and settled yesterday down 1¢ at $2.71. Prices at other market locations were mostly flat. The Chicago Citygate price fell by 2¢, closing at $2.79/MMBtu yesterday. Cheyenne, in southeast Wyoming, rose by 1¢ to $2.53/MMBtu. Prices at PG&E Citygate, serving Northern California, fell by 2¢ over the report week, closing at $3.10/MMBtu yesterday. Other West Coast price points saw larger declines, but none exceeding a dime.
Northeast prices continue to rise on increased power demand. After falling late last week, prices in the Northeast increased early this week as many states in the region saw temperatures averaging between 70° and 80° Fahrenheit. Additionally, TGP Station 245 in central New York is undergoing maintenance, temporarily losing more than 0.2 Bcf/d of capacity. Gas prices at the Algonquin Citygate, serving Boston, started the report week at $3.06/MMBtu, peaked at $3.75 on Monday, and ended the week up at $3.14/MMBtu yesterday. At Transcontinental Pipeline's Zone 6, serving New York City, the spot price started the report week at $2.66/MMBtu, dipped on Friday, and ended the week up at $2.84 yesterday.
Marcellus prices rise slightly, though remain low. Continuing last week's trend, prices in the Marcellus rose at several trading points this report week. On the Transco Leidy Line, prices started the week at $1.01/MMBtu last Wednesday and rose to $1.21 yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices rose from $1.18/MMBtu last Wednesday to $1.32 yesterday. At Tennessee's Zone 4 Marcellus location, prices were flat over the period, beginning at $1.02/MMBtu last Wednesday, dipping to 81¢ on Friday, and ending the week at $1.04.
The final components of the REX Zone 3 East-to-West project, which were cleared by FERC, completed construction work early this week. The final stage of the project places two interconnects and a compressor station in Illinois in service. There were only modest increases in flows on September 1 on REX with completion of this project, according to data from Bentek.
Nymex prices decline. At the New York Mercantile Exchange (Nymex), the September near-month contract began the report week at $2.693/MMBtu last Wednesday and settled at $2.638 on Thursday, when it expired as the near-month contract. The October contract began as prompt-month on Friday at $2.715/MMBtu and settled down a nickel, at $2.648 yesterday. The 12-month strip, averaging the October 2015 through September 2016 Nymex contracts, averaged $2.884/MMBtu for the report period. The Nymex futures contracts for January through March of 2016 are all very close to $3.00/MMBtu, indicating market expectations of a modest winter price premium.
Supply remains flat. Dry natural gas production was similar to the past report week, averaging 72.3 Bcf/d, which is 3.7% higher than last year at this time, according to Bentek Energy data. Imports of natural gas from Canada fell by 1%, while LNG sendout increased by 5%, averaging 0.3 Bcf/d. LNG sendout was dominated by volumes at the Everett terminal in Boston, which saw temperatures increase markedly early this week. Overall supply was unchanged from the previous report period.
Consumption increases slightly. U.S. consumption increased 0.9% for the week, led by a 3% increase in natural gas for power generation (power burn). Power burn increased in all regions but the Southeast. The Midwest largely drove the increase, as power burn in the region rose by 0.7 Bcf/d for the report period, 81% higher than last week. Power burn in the Midcontinent also contributed, rising 0.3 Bcf/d, or 30%, over last week. Industrial consumption, residential/commercial consumption, and exports to Mexico all fell slightly for the week.