Natural Gas Weekly Update

The Henry Hub spot price fell from $4.90 per million British thermal units (MMBtu) last Wednesday to $4.23/MMBtu yesterday.

Henry Hub down 67 cents to $4.23

Natural gas spot prices fell at most locations this report week (Wednesday, November 24 to Wednesday, December 1). The Henry Hub spot price fell from $4.90 per million British thermal units (MMBtu) last Wednesday to $4.23/MMBtu yesterday.
   
International natural gas prices were at or close to all-time highs this report week. Bloomberg Finance, L.P. reports that swap prices for liquefied natural gas (LNG) cargos in East Asia for the balance of the month (December) remained relatively flat at $36.47/MMBtu this report week, the highest weekly average on record going back to January 2020. At the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas spot market in Europe, the day-ahead price rose for the fourth week in a row to a weekly average of $30.67/MMBtu, up $1.21/MMBtu from last week’s average of $29.46/MMBtu. In the same week last year (week ending December 2, 2020), prices in East Asia and at TTF were $7.04/MMBtu and $5.19/MMBtu, respectively.
   
The December 2021 NYMEX contract expired Friday at $5.447/MMBtu, up 37.9 cents/MMBtu from last Wednesday. The January 2022 NYMEX contract price decreased to $4.258/MMBtu, down 85.6 cents/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging January 2022 through December 2022 futures contracts declined 49 cents/MMBtu to $3.944/MMBtu. Natural gas futures contracts for delivery during the summer months fell by less than balance-of-winter months. Futures contracts for winter delivery fell on average by 84.2 cents/MMBtu, and summer-delivery contracts fell by 39.3 cents/MMBtu.
   
The net withdrawals from working gas totaled 59 billion cubic feet (Bcf) for the week ending November 26. Working natural gas stocks totaled 3,564 Bcf, which is 10% lower than the year-ago level and 2% lower than the five-year (2016–2020) average for this week.
   
The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 67 cents/MMBtu, averaging $9.64/MMBtu for the week ending December 1. Ethane prices fell 4%, while natural gas prices on the Houston Ship Channel fell 7%, widening the premium between ethane and natural gas by 8%. Propane prices fell 8% as a result of relatively mild winter temperatures, and a forecast for continuing above-normal temperatures for December across the Midwest and Northeast, where most propane is consumed during the winter heating season. PADD 2 inventories, which had been below the 5-year range since late April, returned back to within range in early November and are currently near the five-year average. Natural gasoline prices fell 11% following a 13% decrease in Brent crude oil prices for the week ending December 1. Normal butane and isobutane prices fell 3% and 1%, respectively.
   
According to Baker Hughes, for the week ending Tuesday, November 23, the natural gas rig count was unchanged at 102, a level it has held for the past three weeks. The number of oil-directed rigs rose by 6 to 467, with a 4-rig gain in the Bakken Basin (ND) and 2-rig gain in the Permian Basin. The total rig count now stands at 569. Oil-directed rigs and total rigs are now at the highest levels since mid-April 2020. The current total rig count is more than double the low level set in the second week of August 2020, when the rig count totaled 244, the lowest total on record going back to 1987.