Maintenance and warming weather lift prices. With planned and unplanned maintenance, along with higher-than-average temperatures, most trading locations experienced increasing prices through the week. Henry Hub spot prices started the report week at $2.56/MMBtu last Wednesday and moved up through the week, closing yesterday at $2.75/MMBtu. At Chicago Citygate, where temperatures began the week on the cool side, prices started the report week at $2.57/MMBtu and gained 17¢ to close at $2.74/MMBtu.
Prices in the Northeast are mixed. The Northeast, especially New England, bucked the rising trend through the report week. Prices at the Algonquin Citygate, which serves Boston, started the week at $2.52/MMBtu last Wednesday and fell to $1.66/MMBtu on Friday before rising to $2.06/MMBtu yesterday, closing 69¢ below the Henry Hub price. This was an overall decrease of about 20% for the week. Similarly, prices at Tennessee Zone 6 200L, with deliveries into New England, opened Wednesday, April 29, at $2.52/MMBtu, fell to $1.75/MMBtu on Friday, and recovered some to close at $2.23/MMBtu yesterday.
At Transcontinental Zone 6 New York, serving New York City, prices began the report week at $2.44/MMBtu, then rose 36¢ over the week, closing at $2.80/MMBtu yesterday, just above the Henry Hub price. On May 1, Transcontinental Pipeline began work on the Leidy Southeast Expansion, a scheduled 43-day maintenance that will loop, or double, a segment of its pipeline between Station 505 and Princeton Junction in New Jersey (Station 210 Pool). Bentek Energy estimated that this maintenance could reduce flows through Leidy by 0.8 billion cubic feet per day (Bcf/d) or more, potentially constraining Northeast production and reducing supplies to New York and the Northeast.
Marcellus prices remain low. At Tennessee's Zone 4 Marcellus trading location, prices opened the week at $1.35/MMBtu last Wednesday, fell below $1 to $0.96/MMBtu on Friday, rose to $1.45/MMBtu in trading on Tuesday, and closed the week at $1.31/MMBtu yesterday. On the Transco Leidy Line, prices began the report week at $1.42/MMBtu last Wednesday, dropped to the week's low of $1.11/MMBtu on Friday, and gained to close at $1.49/MMBtu yesterday. At the Dominion South trading point, prices began the report week at $1.45/MMBtu, fluctuated a little through Friday, but rose to close the week at $1.73/MMBtu yesterday.
Nymex prices up for the week. June's near-month spot contract opened at $2.606/MMBtu last Wednesday and closed the report week at $2.776/MMBtu, up 17¢. The 12-month strip, representing the average of contracts from June 2015 through May 2016, rose over the report week by 14¢, starting last Wednesday at $2.885/MMBtu and closing yesterday at $3.029/MMBtu.
Total supply decreases slightly. According to data from Bentek Energy, total supply decreased by 1.2% week over week as a result of reduced production and lower imports. Dry natural gas production decreased by 0.8%, though it remained 8% greater than the same week last year. Some of the decrease in production may be attributed to the maintenance on Transco's Leidy Line, noted previously, as well as a force majeure declared by Destin Pipelines because of problems at its MP260 offshore platform in the Gulf of Mexico. Imports of Canadian natural gas into the United States dropped off this week, falling 6.4%. Midwestern imports from Canada, which increased by 16.5%, were offset by a reduction of Northeast gas imports, which dropped significantly, likely in response to temperatures that were more than 10° above those of the previous week. LNG sendout was down, with volumes remaining minimal.
Consumption decreases with higher temperatures. Total natural gas consumption fell by 10.8% week over week, with decreased consumption in industrial and residential/commercial sectors, and an increase in both the power sector and exports to Mexico. With many areas experiencing warming temperatures, some above normal, residential/commercial demand fell by more than 30%. Industrial consumption fell as well, dropping 3.4%. Natural gas consumption for electric generation (power burn) increased 0.6% for the week, up by 13.9% over the same period in 2014. Power burn trends were mixed regionally, with the Northeast, Texas, Southwest and the Rockies increasing, up 15.3%, 5.9%, 7.0% and 5.1%, respectively last week. Regionally, the largest increase in power burn was in the Northeast, where it was up 25.7% over the same period last year. Exports to Mexico were up 1.7% this week, which is 25.6% higher than the same week last year.