Prices mixed because of maintenance outages and weather. Natural gas prices were mixed across spot market locations this report period. While above-average temperatures and storms affected some areas, others, like the Northeast, saw cooler weather at the start of the report week, causing demand and prices in the electric-power sector to fluctuate. The Henry Hub spot price began the week at $2.92/MMBtu, dropped slightly through the first half of the report week, but rebounded on Monday with the threat of Tropical Storm Bill making landfall on the Texas Gulf Coast, and closed the week yesterday at $2.93/MMBtu.
Northeast prices down, with Boston down $1. With temperatures moderating during the first half of the report week in the Northeast, and demand down, spot prices in the Northeast dropped through Friday. Transcontinental Zone 6, serving New York City, started the report week at $3.01/MMBtu, and dropped to $2.70/MMBtu on Friday. With hotter temperatures on Monday and Tuesday, prices increased. Prices at that location ended the week at $2.91/MMBtu. Similarly, in New England, the Algonquin Citygate and Tennessee Zone 6 200L, covering Boston and lower New England respectively, started the week above $3.10/MMBtu and dropped to near $1.50/MMBtu on Friday, before increasing on Monday and Tuesday to end the report week above $2.00/MMBtu. Despite this increase, Algonquin Citygate and Tennessee Zone 6 200L were both $1 below their prices last Wednesday, closing at $2.04/MMBtu and $2.06/MMBtu, respectively.
Marcellus prices fall through Friday. With milder weather at the start of the report week, Marcellus prices fell through Friday. Prices at Tennessee Zone 4 Marcellus last Wednesday averaged $1.26/MMBtu, and fell 55¢ (44%) by Friday to 71¢/MMBtu, before increasing to $1.22/MMBtu yesterday. Both the Transco-Leidy Line and Dominion South spot prices increased Wednesday to Wednesday, with prices at Transco-Leidy Line and Dominion South starting the report week at $1.27/MMBtu and $1.49/MMBtu, respectively, and both closing at $1.62/MMBtu yesterday.
Nymex prices rise. At the Nymex, the July contract began the week at $2.891/MMBtu and fell slightly to close at $2.855/MMBtu yesterday. The 12-month strip, which averages the July 2015 through June 2016 Nymex prices, closed at $3.086/MMBtu yesterday, down 3¢ from the week-ago price.
Supply and production remained flat this week. Dry gas production was down by 0.7% week over week, averaging 71.5 billion cubic feet per day (Bcf/d), according to Bentek Energy data, but was up 5.1% over the production for this week last year. Imports of natural gas from Canada fell by 0.2%, with receipts in the West and Midwest decreasing slightly from the previous week, and Northeast receipts decreasing 33.6%. Overall supply decreased by 0.6%. There were no reported effects on natural gas production from Tropical Storm Bill, which made landfall in Texas on Tuesday.
Demand continues to increase, led by power generation. Overall U.S. gas consumption increased by 3.4% this week, with an 8.2% increases in power-sector consumption offsetting a 1.9% decline in consumption in the industrial sector, and a generally flat residential/commercial sector. The increase in natural gas consumed in the power sector was driven by increases in consumption in the Northeast and Southeast. Those regions increased 21.1% and 13.8%, respectively. Power burn was down in the Midwest and Texas by 2.1% and 2.8%, likely due to milder temperatures.
Exports to Mexico increased to 3.1 Bcf/d on June 12, setting an all-time high, according to data from Bentek Energy, and remained at that level through Wednesday. Exports to Mexico increased 10% week over week, and are 40% more than exports for the same week last year.