Henry Hub price reaches lowest level since July 2012. The Henry Hub spot price began the report week last Wednesday at $2.47/MMBtu, then dropped 21¢ by Friday to $2.26/MMBtu, the lowest Henry Hub spot price since July 2012. The price then rose to close at $2.46/MMBtu yesterday. Prices in most markets, except the Northeast, followed a similar pattern, ending down for the week, after reaching weekly lows on Friday. Chicago Citygate spot prices started at $2.56/MMBtu last Wednesday and closed yesterday at $2.46/MMBtu. At PG&E Citygate, serving Northern California, prices started the report week at $2.99/MMBtu and closed yesterday at $2.96/MMBtu.
Northeast prices fluctuate. At the Algonquin Citygate, which serves Boston-area consumers, prices began the week at $1.95/MMBtu before falling to $1.47/MMBtu on Friday, but then rose to close the report week at $2.77/MMBtu. Similarly, spot prices at Tennessee Zone 6, Line 200 (covering parts of New England) began the week at $2.08 on Wednesday, dipped to $1.31/MMBtu on Friday, and then rose to $2.63/MMBtu yesterday. At Transcontinental Pipeline's Zone 6 delivery point into New York City, prices began the week at $2.44/MMBtu, dropped to a weekly low at $1.56/MMBtu on Friday, and rose to $2.45/MMBtu yesterday to end the week. Northeast prices were likely influenced by an operational flow order (OFO) placed by Algonquin on Tuesday, that placed some delivery constraints on the Algonquin system.
Marcellus-area prices end the week below $1. Marcellus-area prices were mixed this week, but remained low. At Tennessee Pipeline's Zone 4 Marcellus trading zone, prices fell from 83¢/MMBtu last Wednesday to 78¢/MMBtu yesterday. On the Transco Leidy Line, prices began the week at 81¢/MMBtu, fluctuated through the week with a low of 66¢ and a high of 99¢, then settled to close at 84¢/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices began the report week at $1.22/MMBtu, fluctuated through the week to close yesterday at 98¢/MMBtu.
Transcontinental Pipeline began maintenance at its Station 515 in eastern Pennsylvania on October 1. The maintenance outage is scheduled to continue through October 22, and is part of its Leidy Southeast Project expansion. This may limit supplies going to the Northeast from the Marcellus region.
Nymex prices drop. The November prompt-month spot contract ended the week at $2.474/MMBtu, down from $2.524 at the start of the report week. The 12-month strip (the average of the 12 contracts between November 2015 and October 2016) dropped slightly from $2.746/MMBtu last Wednesday to $2.729/MMBtu yesterday.
Supply is down. Dry production fell 0.5% for the report week, but was 3.7% above the same week last year, according to Bentek Energy data. Canadian imports increased by 5% over last week, though they were 5.8% below this same week last year. Regionally, the Northeast continued as a net-exporter to Canada during this report period. U.S. imports from Canada to the Midwest decreased by 3.6% for the week, while they increased by 5.6% in the West. LNG sendout was down by 34.1%, remaining at minimal levels.
Consumption rose for the week. Total consumption rose by 1.9% week over week and was 0.4% above consumption for the same week last year. Consumption of natural gas for power generation fell 10.8% in response to generally mild temperatures, though residential and commercial consumption rose 28%, when compared to last week. Consumption in the industrial sector rose 1.8%. U.S. exports to Mexico decreased by 5.8% when compared to the previous week; however exports to Mexico were up nearly 50% over the same period in 2014.
Hurricane Joaquin heads to the east, but heavy rain and wind cause power disruption in the Southeast. While Hurricane Joaquin, rated as high as a category 4 hurricane, shifted track away from the United States, heavy rains and strong winds from an inland storm slowly moved across parts of the Southeast over the weekend. With wind gusts of up to 50 miles per hour reported, 86,055 customers in Georgia, North Carolina, South Carolina, and Virginia lost power, potentially reducing natural gas consumption for the region. In South Carolina, in particular, localized flooding slowed power restoration efforts.