Author Archives: Chris McGill

Chris McGill Natural Gas Market Indicators: February 15, 2017

In North America, natural gas prices have slid below $3.00 per MMBtu with what is turning into another less-than-bitter winter for the lower-48 states. Without strong traditional sector demand—heating loads in homes and businesses—the market has instead found incremental demand and year-on-year growth from pipeline exports to Mexico and LNG shipments from Sabine Pass. Current National Weather Service forecasts point to warmer conditions for most of the country through the balance of the current winter heating season.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Chris McGill Natural Gas Market Indicators: January 27, 2017

The first three months of the 2016-17 winter heating season have been warmer than normal in aggregate for every region of the country. However, a recent peak day volume was nearly as high as the peak day from the first quarter 2014 polar vortex. Gas demand has been growing too, particularly as a result of institutional changes in demand from a recovering industrial sector, a power sector with an insatiable appetite for incremental gas generation.

After beginning the winter heating season with the largest fill in history, underground storage volumes are now 0.7 percent below the five-year average as lower temperatures and new structural demand in the form of natural gas power generation, firm industrial demand, seasonal heating loads and exports have facilitated triple-digit net withdrawals six of the past seven weeks.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Chris McGill Natural Gas Market Indicators: December 15, 2016

Natural gas demand in the lower-48 climbed above 100 Bcf on December 8, a first for the 2016–17 winter and the highest consumption level since February. If arctic air moves into North America and temperatures drop and stay low, we’re likely to see a number of 100+ Bcf days during December. Supplies are still well positioned to meet this uptick in demand.

Storage inventories are still at about 3.9 Tcf; production remains above 70 Bcf per day; and pipeline and LNG imports are there to help meet additional pulls on the system. However, the market has decided that supplies are going to be needed sooner rather than later. Natural gas moved into normal backwardation in early December.

With January 2017 contracts calling for a premium to subsequent months, traders may be sending signals that even more supplies could be needed to meet a January cold snap. All is dependent on where temperatures go from here. The market is poised and ready to meet whatever demand is thrown at it. Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Chris McGill Natural Gas Market Indicators: November 14, 2016

Relatively low acquisition prices, an extraordinarily warm summer and retiring coal-fired power generation combined to push natural gas volumes for power generation in the lower-48 to new highs in 2016. Natural gas spot prices failed to close above $3.00 per MMBtu at any time during the summer, in turn creating a market dynamic ripe for coal-to-gas re-dispatch on the electric grid. But that wasn’t the only coal-to-gas dynamic; the 22 gigawatts of coal-fired power plant capacity retired during the past two years also created new demand for natural gas. And this past summer turned out to be the hottest of any in 50 years.

The combined effects of these factors meant that from April through October gas draws for power generation averaged 30 Bcf per day, which is 6 percent higher than last year and 18 percent higher than the five-year average. Remarkable demand indeed. Now as we approach winter, heating loads in small volume markets will predominantly shape the market—that is, if it ever gets cold across a significant portion of the country. Storage inventories are elevated and in record territory. Production is strong and stable. Even rig counts are starting to rise once again. In all, North American natural gas supplies are robust while, for the most part, temperatures are mild—a recipe for modest forward pricing.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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