November 17, 2023
Working natural gas stocks in the Lower 48 states of the U.S. concluded the refill season on October 31, reaching 3,776 billion cubic feet (Bcf), as reported in the Weekly Natural Gas Storage Report (WNGSR) released on November 16. This figure marks the second-highest end-of-refill-season inventory in the last five years. The total inventory surpassed the five-year end-of-October average by 5% (178 Bcf) and was 6.8% (239 Bcf) higher than the previous year at the same time.
The increased inventories at the start of the refill season resulted in lower net injections of natural gas compared to previous years. Initial working gas levels for the 2023 refill season were at 1,823 Bcf, the second-highest level since 2017 and 19% above the five-year average. Net injections for the 2023 season (April 1–October 31) were estimated at 1,953 Bcf, representing a 5% (109 Bcf) decrease from the five-year average and a 9% (203 Bcf) decrease from the previous year’s refill season.
Despite a 3% increase in U.S. dry natural gas production, net injections decreased from the previous year’s levels. U.S. dry natural gas production averaged 103.8 billion cubic feet per day (Bcf/d) during the 2023 refill season, up from 100.4 Bcf/d in the 2022 season. Natural gas consumption saw a 3% increase (2.3 Bcf/d) from the previous year, with the electric power sector leading with a 6% (2.1 Bcf/d) rise, while residential and commercial sectors combined consumption decreased by 2% (0.3 Bcf/d), and industrial demand increased by nearly 1% (0.2 Bcf/d). Natural gas exports also rose, with liquefied natural gas (LNG) exports up by 15% (1.5 Bcf/d) and pipeline exports increasing by 8% (0.7 Bcf/d).
Throughout most of the early weeks of the refill season, net injections exceeded the five-year average, peaking at 370 Bcf during the week ending June 30. However, in the subsequent 11 weeks, net injections fell below the five-year average. The surplus to the five-year average reached its lowest point at 163 Bcf during the week ending October 6, rebounding in the final weeks of the refill season due to cooler temperatures reducing air conditioning demand and, consequently, natural gas consumption for electric power.
While the traditional end of the natural gas storage injection season is October 31, net injections often continue into November.
Market Highlights: (For the week ending Wednesday, November 15, 2023)
Prices:
Henry Hub spot price: Rose 66 cents from $2.21 per million British thermal units (MMBtu) last Wednesday to $2.87/MMBtu yesterday.
Henry Hub futures price: December 2023 NYMEX contract increased 0.3 cents, from $3.106/MMBtu last Wednesday to $3.109/MMBtu yesterday. The 12-month strip averaging December 2023 through November 2024 futures contracts declined 2.2 cents to $3.284/MMBtu.
Select regional spot prices: Natural gas spot prices rose at most locations this report week (Wednesday, November 8, to Wednesday, November 15), ranging from a 35-cent/MMBtu increase at the Chicago Citygate to a $3.10/MMBtu increase at Malin, Oregon.
Prices in the Northeast:
Algonquin Citygate: Rose 57 cents from $1.95/MMBtu last Wednesday to $2.52/MMBtu yesterday.
Transco Zone 6 pricing hub in New York: Rose 65 cents from $1.60/MMBtu last Wednesday to $2.25/MMBtu yesterday.
Prices in the Pacific Northwest:
Sumas on the Canada-Washington border: Rose $3.08 from $2.85/MMBtu last Wednesday to $5.93/MMBtu yesterday.
Prices in California:
Malin, Oregon: Rose $3.10 from $2.90/MMBtu last Wednesday to $6.00/MMBtu yesterday.
SoCal Citygate in Southern California: Rose $0.50 from $6.49/MMBtu last Wednesday to $6.99/MMBtu yesterday.
Prices at the Waha Hub in West Texas: Rose $1.39 this report week, from $0.96/MMBtu last Wednesday to $2.35/MMBtu yesterday.
International futures prices:
Liquefied natural gas (LNG) cargoes in East Asia: Decreased 29 cents to a weekly average of $17.17/MMBtu.
Natural gas futures at the Title Transfer Facility (TTF) in the Netherlands: Increased 33 cents to a weekly average of $14.97/MMBtu.
Natural gas plant liquids (NGPL) prices:
Natural gas plant liquids composite price at Mont Belvieu, Texas: Fell by 24 cents/MMBtu, averaging $6.70/MMBtu for the week ending November 15.
Weekly average ethane prices fell 12%, while weekly average natural gas prices at the Houston Ship Channel rose 16% week over week.
Supply and Demand:
Supply: Average total supply of natural gas rose by 0.9% (1.0 Bcf/d) compared with the previous report week.
Demand: Total U.S. consumption of natural gas rose by 7.9% (6.1 Bcf/d) compared with the previous report week.
Liquefied Natural Gas (LNG):
Average natural gas deliveries to U.S. LNG export terminals rose 2.2% (0.3 Bcf/d) week over week, averaging 14.2 Bcf/d.
Rig Count:
Natural gas rig count remained unchanged at 118 rigs for the week ending Tuesday, November 7.
Storage:
For the week ending November 10, net injections into storage totaled 60 Bcf, exceeding the five-year average of 20 Bcf and last year’s 66 Bcf during the same week.
Working natural gas stocks totaled 3,833 Bcf, 6% more than the five-year average and 5% more than last year at this time, according to The Desk survey of natural gas analysts. Estimates for the weekly net change to working natural gas stocks ranged from net injections of 24 Bcf to 68 Bcf, with a median estimate of 44 Bcf.