Natural gas prices decreased in most market locations nationwide over the report week, as temperatures remained slightly above average across most of the country, limiting the demand for excess cooling or heating. The Henry Hub spot price began the report week at $2.68/MMBtu last Wednesday and settled yesterday at $2.59/MMBtu. Prices at other locations also declined, most by less than 5%. In the West, prices at PG&E Citygate, serving Northern California, started the report period at $3.14/MMBtu last Wednesday, then dropped to $3.07/MMBtu yesterday. Prices at the Chicago Citygate declined by 5¢ over the report week, closing at $2.65/MMBtu yesterday. Other price points saw similar declines.
Northeast prices varied through the report week. In the Northeast, prices in New England saw some upward pressure due to compressor maintenance outages, which started Thursday and ended Tuesday, at Cromwell, Connecticut on the Algonquin Gas Transmission pipeline. Warmer-than-normal temperatures during the first few days of the report week may also have influenced pricing. Algonquin Citygate, which serves Boston, began the week Wednesday at $2.57/MMBtu, rose to $4.77/MMBtu on Thursday, then dropped to $3.13/MMBtu Monday as flows improved, closing the week at $2.00/MMBtu yesterday. Similarly, at the Tennessee Zone 6 200 line, serving lower New England, prices began the report week last Wednesday at $2.60/MMBtu, rose to $4.42/MMBtu on Thursday, and dropped through the remainder of the period to close down at $2.02/MMBtu yesterday. At Transcontinental Pipeline's Zone 6 trading point for New York City delivery, the spot price fluctuated during the report week, starting at $2.66 this past Wednesday dipping to $1.60 on Friday, then increasing to close at $2.31/MMBtu yesterday.
Marcellus prices remain low. Most Marcellus-area prices decreased during the report week. At Tennessee's Zone 4 Marcellus location, prices started the week at $1.24/MMBtu last Wednesday then dropped to $1.08/MMBtu yesterday. On the Transco Leidy Line, prices decreased from $1.28/MMBtu last Wednesday to $1.10/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased by 8¢, falling from $1.36/MMBtu to $1.28/MMBtu.
The Ohio Pipeline Energy Network (OPEN) project entered partial service on September 18. Flows increased from OPEN's Tompkinsville compressor station to 1.1 Bcf/d on September 18, a 0.4 Bcf/d increase from its 30-day average, indicating that the OPEN project is ramping up to support takeaway from the Marcellus and Utica plays, according to Bentek Energy data.
Nymex prices decrease slightly. At the Nymex, the October contract began the week at $2.660/MMBtu and ended the report week down slightly, at $2.569/MMBtu yesterday. The October 2015 price is more than $1.24 below the October 2014 price of $3.816/MMBtu from this time last year. The 12-month strip, which averages the October 2015 through September 2016 Nymex prices, closed at $2.793/MMBtu yesterday, down slightly from the week-ago strip price of $2.871/MMBtu.
Supply increases slightly. Dry natural gas production increased by 0.2% this week, averaging 72.1 Bcf/d, 3.9% higher than the level for this week in 2014. Contributing to this increase, Northeast production set a new high at 20.57 Bcf/d, according to Bentek Energy data. Imports of natural gas from Canada rose by 1.3% week over week. Overall, supply increased slightly, by 0.1%.
Consumption decreases. U.S. consumption decreased by 0.1%, compared to the last report week, with total natural gas used for power generation (power burn) flat. Regional power burn increases in the Midwest (18%), Southeast (4%), Texas (8%), and Mid-Continent (42%) were offset by declines in the rest of the country. Consumption in the residential/commercial sectors increased by 0.6%, while industrial sector consumption decreased by 1%. Exports to Mexico averaged 3.0 Bcf/d, a 0.1% decrease from the previous week, though 39.8% higher than exports for the same week last year.