Category Archives: Natural Gas

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

Richard Meyer Natural Gas Market Indicators: June 15, 2016

The market is showing clear signs of tightening. Slowly falling production is eating into supplies while strengthening demand from power burn and exports means the balance into storage this June has been well below average. This deficit gives a little relief to a market with storage stocks at levels about two months ahead of schedule for a typical injection season.

The market has rationalized itself with rising prices, up now $0.60 from that $2 sticking point witnessed through much of the winter. Key to this balance, as always, will be summer weather. If temperatures drive more cooling demand, the bullish injection deficit is likely to persist.

Conversely, mild temperatures could mean additional volumes into storage, which would likely prove bearish for this market. However, the potential for additional exports through year-end may offer some additional flexibility on the demand side.

As these factors adjust in relation to each other, it’s important to step back and recognize that given the diversity and strength of demand and the rapid evolution in upstream activity just how resilient this market has been, as evidenced by lower and relatively stable prices for natural gas.

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