The average volume of natural gas flowing to power generators year-to-date in 2016 exceeds that of 2015 by about six percent, recognizing that 2015 was a record year for gas to power generation in and of itself. By comparison, consumption in the residential and commercial sectors has averaged 3.0 Bcf per day lower in 2016 (down 11 percent) compared to 2015 due primarily to the incredibly mild winter across the country during the first quarter of 2016, resulting in a total demand picture for natural gas that is down about two percent from the prior year.
To balance the market, production had to fall and has done so by decreasing about 300 MMcf per day on average year-to-date. Balance – that is the theme for this summer – is captured by pricing movements, which started much closer to $2 per MMBtu earlier in the year, rose to near $3 for futures contracts at Henry Hub and have since retreated. Balance – an appropriate theme as we watch the Olympic gymnastics competition from Rio.
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.