Released January 27, 2025 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Anya, Blair, Demi, Cora and Enzo. No, this isn't a 70s pop group; it's the list of winter storms (so far) that have swept across various regions of North America this winter. While they have dumped much snow and dropped temperatures, the U.S. Energy Information Administration's (EIA) Natural Gas Weekly Update shows that spot prices week-to-week dropped across most regions, although there were intraweek spikes, as Enzo blew in through the southern U.S. And while storage has dropped, supplies are still basically in line with five-year averages, as drawdowns always exceed input during the winter.
At the Henry Hub, the spot price Wednesday, January 22, was $3.89 per million British thermal units (MMBtu), down .54 from the January 15 level of $4.43/MMBtu. But in between, on Friday, January 17, Henry reached an intraweek high of $10.07/MMBtu as utilities prepared for Enzo's higher demand.
Overall, most locations saw a decrease by Wednesday as the storm passed through. The Natural Gas Weekly Update report noted, "Price changes ranged from a decrease of 97 cents at PG&E Citygate to an increase of $11.04 at Transco Zone 6 NY (New York)."
In Texas, Enzo's passing caused prices to drop by 91 cents to $3.31/MMBtu on January 23. Ahead of the storm, the price on January 17 peaked at $8.24/MMBtu.
One exception was in the Northeast, as the eastwardly moving cold air reached there last. "At the Algonquin Citygate, which serves Boston-area consumers, the price rose $4.24 from $14.75/MMBtu last Wednesday (January 17) to $18.99/MMBtu yesterday (January 22)," the EIA reported on Thursday.
Southeast prices also rose at FGT Citygate, where they almost tripled from last week's $5.26/MMBtu to 1/23/25's $15.44/MMBtu.
International Futures Mixed
The EIA quoted Bloomberg Finance L.P.'s weekly average front-month prices for liquefied natural gas (LNG) cargoes in East Asia as dropping 14 cents to a weekly average of $14.01/MMBtu. That's up considerably from the same period in 2024, when futures averaged $9.49/MMBtu.
At the Title Transfer Facility (TTF) in the Netherlands, the most recent week's futures increased by 57 cents week-over-week to a weekly average of $14.57/MMBtu.
Storage drops, but remains within 5-year norms
The succession of winter storms in recent weeks contributed to a significant spike in demand, which combined with a small drop in supply to reduce underground storage levels.
U.S. underground storage figures had been dropping since November 22, 2024, when storage peaked slightly above the five-year average, at 3,967 billion cubic feet (Bcf). On January 17, storage was at 2,892 Bcf, slightly closer to the five-year average maximum than to the five-year average minimum.
IIR Energy Market Strategist Geoffrey S. Lakings said that the U.S. has withdrawn about 480 Bcf of natural gas from storage over the last two weeks. While that was significantly below market expectations, Lakings said that's about 12% of the 3,967 Bcf that was in storage in November, a lot for just two weeks.
Supply/Demand Changes
Based on IIR Energy pipeline nominations data, natural gas production fell by 0.7% or 0.7 Bcf/d on week ended January 22 compared to the previous week. Imports from Canada, on the other hand, grew by 7.7% (0.6 Bcf/d) over the previous reporting week.
Colder-than-normal temperatures from Enzo contributed to a 4.0% rise in nationwide consumption compared to the previous week, increasing by 4.6 Bcf/d. Here's how that breaks out among sectors: Residential and commercial demand rose by 6.8% (3.6 Bcf/d), while power generation consumption rose by 1.3% (0.5 Bcf/d). Industrial demand rose by 1.8% (0.48 Bcf/d) from the previous week.
Natural gas exports by pipeline to Mexico dropped slightly, and natural gas headed to LNG export facilities, according to LNG pipeline receipts, also dropped slightly.
What is the big picture?
So far, natural gas storage is holding its own regarding historic figures, but Lakings said he sees some demand upheaval in the coming months. "With increases in natural gas used for power and for LNG export to Europe and East Asia, a summer that is as hot as this winter has been cold could stretch demand," he said. "Later this year we could see demand increase by 4 Bcf/d or more. That, in turn, could limit summer EOS (end-of-season) storage levels to as little as 3.2 Tcf (trillion cubic feet) unless production also sees an uptick."
With Russian natural gas deliveries to Europe in increasing limbo, the European Union (EU) may become increasingly desperate for U.S. LNG.
Lakings added that Morgan Stanley has projected Henry Hub prices to hit $4.15/MMBtu in 2025, significantly higher than the EIA's postulate of $3.10/MMBtu. This reinforces what he sees as tighter inventories due to higher demand, while producers struggle to boost output to keep up.
For the near future, how the U.S. storage/pricing picture looks at the end of the winter season depends at least somewhat on how many more storm names Old Man Winter has in his hip pocket. "Long before we would reach Xia, Ygenny and Zahir (names on the Weather Channel's alphabetical list), it will indeed be a wild ride," Lakings said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
At the Henry Hub, the spot price Wednesday, January 22, was $3.89 per million British thermal units (MMBtu), down .54 from the January 15 level of $4.43/MMBtu. But in between, on Friday, January 17, Henry reached an intraweek high of $10.07/MMBtu as utilities prepared for Enzo's higher demand.
Overall, most locations saw a decrease by Wednesday as the storm passed through. The Natural Gas Weekly Update report noted, "Price changes ranged from a decrease of 97 cents at PG&E Citygate to an increase of $11.04 at Transco Zone 6 NY (New York)."
In Texas, Enzo's passing caused prices to drop by 91 cents to $3.31/MMBtu on January 23. Ahead of the storm, the price on January 17 peaked at $8.24/MMBtu.
One exception was in the Northeast, as the eastwardly moving cold air reached there last. "At the Algonquin Citygate, which serves Boston-area consumers, the price rose $4.24 from $14.75/MMBtu last Wednesday (January 17) to $18.99/MMBtu yesterday (January 22)," the EIA reported on Thursday.
Southeast prices also rose at FGT Citygate, where they almost tripled from last week's $5.26/MMBtu to 1/23/25's $15.44/MMBtu.
International Futures Mixed
The EIA quoted Bloomberg Finance L.P.'s weekly average front-month prices for liquefied natural gas (LNG) cargoes in East Asia as dropping 14 cents to a weekly average of $14.01/MMBtu. That's up considerably from the same period in 2024, when futures averaged $9.49/MMBtu.
At the Title Transfer Facility (TTF) in the Netherlands, the most recent week's futures increased by 57 cents week-over-week to a weekly average of $14.57/MMBtu.
Storage drops, but remains within 5-year norms
The succession of winter storms in recent weeks contributed to a significant spike in demand, which combined with a small drop in supply to reduce underground storage levels.
U.S. underground storage figures had been dropping since November 22, 2024, when storage peaked slightly above the five-year average, at 3,967 billion cubic feet (Bcf). On January 17, storage was at 2,892 Bcf, slightly closer to the five-year average maximum than to the five-year average minimum.
IIR Energy Market Strategist Geoffrey S. Lakings said that the U.S. has withdrawn about 480 Bcf of natural gas from storage over the last two weeks. While that was significantly below market expectations, Lakings said that's about 12% of the 3,967 Bcf that was in storage in November, a lot for just two weeks.
Supply/Demand Changes
Based on IIR Energy pipeline nominations data, natural gas production fell by 0.7% or 0.7 Bcf/d on week ended January 22 compared to the previous week. Imports from Canada, on the other hand, grew by 7.7% (0.6 Bcf/d) over the previous reporting week.
Colder-than-normal temperatures from Enzo contributed to a 4.0% rise in nationwide consumption compared to the previous week, increasing by 4.6 Bcf/d. Here's how that breaks out among sectors: Residential and commercial demand rose by 6.8% (3.6 Bcf/d), while power generation consumption rose by 1.3% (0.5 Bcf/d). Industrial demand rose by 1.8% (0.48 Bcf/d) from the previous week.
Natural gas exports by pipeline to Mexico dropped slightly, and natural gas headed to LNG export facilities, according to LNG pipeline receipts, also dropped slightly.
What is the big picture?
So far, natural gas storage is holding its own regarding historic figures, but Lakings said he sees some demand upheaval in the coming months. "With increases in natural gas used for power and for LNG export to Europe and East Asia, a summer that is as hot as this winter has been cold could stretch demand," he said. "Later this year we could see demand increase by 4 Bcf/d or more. That, in turn, could limit summer EOS (end-of-season) storage levels to as little as 3.2 Tcf (trillion cubic feet) unless production also sees an uptick."
With Russian natural gas deliveries to Europe in increasing limbo, the European Union (EU) may become increasingly desperate for U.S. LNG.
Lakings added that Morgan Stanley has projected Henry Hub prices to hit $4.15/MMBtu in 2025, significantly higher than the EIA's postulate of $3.10/MMBtu. This reinforces what he sees as tighter inventories due to higher demand, while producers struggle to boost output to keep up.
For the near future, how the U.S. storage/pricing picture looks at the end of the winter season depends at least somewhat on how many more storm names Old Man Winter has in his hip pocket. "Long before we would reach Xia, Ygenny and Zahir (names on the Weather Channel's alphabetical list), it will indeed be a wild ride," Lakings said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
