Natural gas prices mostly move down. Prices at most market locations fell modestly over the report week, with the exception of the Northeast. Temperatures yesterday were cooler in the western half of the country compared with last week, particularly in the Rockies. Most trading points in the Rockies decreased by between 10¢ and 20¢/MMBtu. Pacific Coast trading points similarly declined, with Malin (in southern Oregon) falling 14¢ to close at $2.62/MMBtu yesterday, and PG&E Citygate (in central California) falling 18¢ to close at $3.11/MMBtu yesterday. Prices in the Rockies, Midwest, and South Central regions posted similar movements.
Prices in the Northeast reach record lows but rebound. This past Thursday, prices fell to record lows at several trading points in the region. The Algonquin Citygate price, serving Boston, began at $1.23/MMBtu last Wednesday, and fell to 82¢/MMBtu the following day. The price jumped back up Monday and closed at $1.35/MMBtu yesterday. Similarly, Transco Zone 6 New York, serving New York City, began the week at $1.24/MMBtu, fell to 89¢ on Thursday, and closed at $2.27/MMBtu yesterday. Thursday prices for Algonquin and Transco Zone 6 NY represent the lowest-recorded closing prices in Natural Gas Intelligence's database, which have those series going back to 1999 and 1998, respectively. Thursday featured very mild weather going into the holiday weekend, coupled with robust supply.
Marcellus-area prices remain low. Marcellus-area prices hovered around $1.00/MMBtu for most of the report week, and dipped on Thursday with other northeastern prices such as Algonquin and Transco Zone 6. Tennessee Zone 4 Marcellus prices fell from 97¢/MMBtu last Wednesday to 60¢/MMBtu on Thursday, and closed the week at 98¢/MMBtu. On the Transcontinental Leidy Line, prices began at $1.01/MMBtu last Wednesday, fell to 63¢/MMBtu on Thursday, and finished the report week at $1.05/MMBtu yesterday.
Nymex prices increase. The August Nymex contract began the week at $2.783/MMBtu last Wednesday and settled at $2.685/MMBtu yesterday, a decrease of 10¢. The near-month Nymex price was $4.204 on July 9 last year, 36% higher than yesterday's price. Prior to 2015, the near-month price has not been this low since summer 2012. Summer 2012 is remembered for its extremely low gas prices because of high production and high storage levels from the mild winter that preceded it.
Supply increases slightly. According to data from Bentek Energy, dry natural gas production increased slightly this week, rising 0.3% and averaging 72.5 Bcf/d, which is 5.4% higher than last year's level. Net imports of natural gas from Canada were essentially flat, with the Northeast continuing net exports to eastern Canada. LNG sendout was up 37% for the week, but remains a minor contributor to supply.
Demand decreases, driven by reductions in power-sector consumption. U.S. natural gas consumption was down by 1.8% this week, led by reductions in gas consumption by the power sector, which fell by 4.9% nationally. The reduction was partly driven by the holiday. Power burn on Friday July 3 was about 3 Bcf lower than Thursday, despite similar temperatures for the two days. Consumption ticked up slightly in other sectors. Industrial consumption increased by 0.5%; residential/commercial consumption increased by 2.0%; and exports to Mexico increased by 1.8%.