Category Archives: Natural Gas

Chris McGill Natural Gas Market Indicators: August 31, 2016

An interesting dynamic has developed this year regarding storage injections. While injections have been modest due to power generation loads, but consistently positive in the East, Midwest and Mountain regions, the South Central region has demonstrated a different pattern: working gas inventories in the South Central (producing) region have declined for eight of the nine weeks going back to mid-June. This is, of course, partly a function of salt cavern flexibility in injection/withdrawal cycling and the demand created by a hot summer.

Compared to historical operations, this is remarkable. It is also indicative of where exactly the market is working to rebalance following tepid withdrawal season that left a near 50 percent above-average supply glut as injections resumed earlier in the year. The flexibility of the US natural gas market is shown here in high relief.

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.

Posted in Natural Gas, Natural Gas Market Indicators | Leave a comment

Chris McGill Natural Gas Market Indicators: August 11, 2016

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.

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

Posted in Natural Gas, Natural Gas Market Indicators | Leave a comment

Richard Meyer Natural Gas Market Indicators: July 28, 2016

Nearly 10 U.S. nuclear reactors have announced intent to retire through 2019. The nearly 9 GW of nuclear capacity these plants represent has a gas burn equivalent of 1.35 Bcf per day, according to estimates from Bloomberg New Energy Finance. This represents the potential upside for natural gas as it fills the gaps created by the shuttering nukes.

Looking at the more immediate, natural gas to power generation reached 41 Bcf per day at times during July. When that occurs net storage injections are usually reduced and daily volumes of added working gas fall into low single digits. Even for a day or two national inventories can indicate as much gas coming out of storage as going in or even a net withdrawal (estimated small net withdrawal by Bentek Energy for July 25).

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.

Posted in Natural Gas, Natural Gas Market Indicators | Leave a comment

Chris McGill Natural Gas Market Indicators: July 15, 2016

Natural gas prices tested the $3 per MMBtu mark for prompt-month futures at the end of June, but have retreated back about $0.25 given strength in storage inventories and a stubborn daily production rate that seems resistant to sustaining itself below 70 Bcf per day. However, the storage supply overhang is beginning to shrink as, of course, it should, while the net injection season progresses toward “operationally full” or perhaps even a new inventory record.

Since the beginning of the fourth week of May, the country has seen seven straight weeks of warmer than normal temperatures and thus, more cooling degree days than normal. In fact, as of the beginning of July, cooling degree days were running 18.6 percent above average with the cumulative counts 38 percent higher or more in the New England and Middle Atlantic regions. Only the West South Central region at 8.4 percent warmer was cumulatively below 14 percent warmer than normal among all regions of the country.

Clearly, as natural gas has fed power generation loads associated with the warmer temperatures, a more closely balanced supply and demand picture has emerged this summer coupled with small decreases in domestic production. The current 14-day temperature outlook from the National Oceanographic and Atmospheric Administration shows warmer than normal conditions continuing with the exception of the Pacific Northwest, which is expected to be cooler.

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.

Posted in Natural Gas, Natural Gas Market Indicators, weather | Leave a comment