Natural Gas Weekly Update

The Henry Hub spot price fell $1.38 from $7.99 per million British thermal units (MMBtu) last Wednesday to $6.61/MMBtu yesterday.

Henry Hub drops $1.38 to $6.61

Henry Hub spot price: The Henry Hub spot price fell $1.38 from $7.99 per million British thermal units (MMBtu) last Wednesday to $6.61/MMBtu yesterday.

Henry Hub futures prices
: The October 2022 NYMEX contract expired yesterday at $6.868/MMBtu, down 91 cents from last Wednesday. The November 2022 NYMEX contract price decreased to $6.955/MMBtu, down 87 cents from last Wednesday to yesterday. The price of the 12-month strip averaging November 2022 through October 2023 futures contracts declined 50 cents to $5.741/MMBtu.

Select regional spot prices: Natural gas spot prices fell at most locations this report week (Wednesday, September 21 to Wednesday, September 28). Week-over-week decreases at most major pricing hubs ranged from $0.70 to $2.00.

Reduced electricity demand contributed to lower natural gas prices for the Florida market this report week. The Florida Gas Transmission (FGT) Citygate spot price, which reflects deliveries into Florida via the Florida Gas Transmission pipeline, decreased $2.74, more than other major trading hubs, from $9.61/MMBtu last Wednesday to $6.87/MMBtu yesterday. Natural gas consumption in the electric power sector in the Southeast declined by 10%, or 1.1 billion cubic feet per day (Bcf/d) week over week, and natural gas flows into Florida yesterday were down an estimated 26% (1.3 Bcf/d) from two days ago, according to data from PointLogic. In advance of Hurricane Ian, hundreds of thousands of residents evacuated parts of Florida, which contributed to reduced consumption of natural gas in the electric power sector. Widespread power outages reported across Florida as a result of the hurricane, which made landfall yesterday between Fort Myers and Tampa, will lead to lower natural gas consumption for power generation in the near term.

In the Northeast, at the Algonquin Citygate, which serves Boston-area consumers, the price decreased $1.21 from $6.40/MMBtu last Wednesday to $5.19/MMBtu yesterday. At the Transco Zone 6 trading point for New York City, the price decreased $1.17 from $5.95/MMBtu last Wednesday to $4.78/MMBtu yesterday. In the Appalachia region, the Tennessee Zone 4 Marcellus spot price decreased $1.40 from $6.03/MMBtu last Wednesday to $4.63/MMBtu yesterday, and the price at Eastern Gas South in southwest Pennsylvania fell $1.35 from $6.10/MMBtu last Wednesday to $4.75/MMBtu yesterday. Temperatures in the Northeast region ranged within seasonal norms this report week and heating degree days (HDD) displaced cooling degree days (CDD). In the Pittsburgh Area, temperatures averaged 56°F, which resulted in 62 HDDs, or 28 HDDs more than normal. There were no CDDs this week, 10 CDDs lower than normal. Natural gas consumption decreased by 6%, or 0.9 Bcf/d this report week, according to data from PointLogic. Consumption in the electric power sector decreased by 25% (2.3 Bcf/d), while consumption in the residential and commercial sectors increased by 44% (1.3 Bcf/d).

The price at the Waha Hub in West Texas,
which is located near Permian Basin production activities, fell $1.15 this report week, from $5.09/MMBtu last Wednesday to $3.94/MMBtu yesterday. On Monday, the Waha Hub fell to $1.77/MMBtu, the lowest price in 2022, and traded $4.98 below the Henry Hub price. This price difference represents the widest discount to Henry Hub since April 20, 2020, when the difference was -$6.45/MMBtu. The Waha Hub price fell to -$4.74/MMBtu that day. Wide discounts at the Waha Hub relative to the Henry Hub price generally reflect regional constraints on pipelines flowing natural gas to other markets.