Natural Gas Weekly Update

The Henry Hub spot price fell from $8.30 per million British thermal units (MMBtu) last Wednesday to $7.51/MMBtu yesterday.

Henry Hub drops 79 cents to $7.51

Spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, May 4, to Wednesday, May 11). The Henry Hub spot price fell from $8.30 per million British thermal units (MMBtu) last Wednesday to $7.51/MMBtu yesterday.

International spot prices: International natural gas spot prices decreased this report week. Bloomberg Finance, L.P., reports that the swap prices for liquefied natural gas (LNG) cargoes in East Asia fell 31 cents/MMBtu to a weekly average of $23.62/MMBtu. At the Title Transfer Facility (TTF) in the Netherlands, the most liquid natural gas spot market in Europe, the day-ahead price decreased $2.83/MMBtu to a weekly average of $28.01/MMBtu. The price at TTF averaged above the East Asia price for the fourth week in a row. Historically, natural gas prices in East Asia average above natural gas prices in Europe. In the same week last year (week ending May 12, 2021), the prices in East Asia and at the TTF were $9.11/MMBtu and $8.99/MMBtu, respectively.

Futures: The price of the June 2022 NYMEX contract decreased 77.5 cents, from $8.415/MMBtu last Wednesday to $7.640/MMBtu yesterday. The price of the 12-month strip averaging June 2022 through May 2023 futures contracts declined 65.9 cents to $7.097/MMBtu.

Storage: The net injections to working gas totaled 76 billion cubic feet (Bcf) for the week ending May 6. Working natural gas stocks totaled 1,643 Bcf, which is 19% lower than the year-ago level and 16% lower than the five-year (2017–2021) average for this week.

NGPLs: The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 20 cents/MMBtu, averaging $12.59/MMBtu for the week ending May 11. Weekly average ethane prices rose 2%, following the 4% increase in natural gas prices at the Houston Ship Channel. The ethane premium to natural gas narrowed by 10%. The price of ethylene rose 4%, resulting in a wider ethane to ethylene spread, which rose 10%. Brent crude oil prices rose 1%, while prices of heavier natural gas liquids fell. Natural gasoline prices fell 2%, normal butane and isobutane prices fell 5% and 3%, respectively, and propane prices fell 2%. The propane discount to crude oil widened by 11%.

Rigs: According to Baker Hughes, for the week ending Tuesday, May 3, the natural gas rig count increased by 2 rigs week over week to 146 rigs. The Marcellus added two rigs, the Haynesville added one rig, and one rig was dropped in an unspecified producing region. The number of oil-directed rigs increased by 5 rigs to 557 rigs. The Mississippian and Granite Wash each added one rig, four rigs were added in unspecified producing regions, and one rig was dropped in the Cana Woodford. The total rig count now stands at 705 rigs, the highest level since March 27, 2020, and 257 rigs more than the same week last year.