Natural gas liquids prices are up week-on-week based on rising propane and ethane prices. The weekly average natural gas plant liquids composite price rose 1.2% this week to $11.00/MMBtu. Propane spot prices were the largest contributor to the composite increase, rising by 5.0% because of elevated demand, while ethane prices rose by 7.2%.
Gas consumption declines as weather warms. Total natural gas consumption for the report week declined by 8.8% compared with last week, as temperatures recovered from lows reached during last week’s cold snap. Residential/commercial sector and electric sector consumption decreased by 8.9% and 15.5%, respectively. The largest percentage decreases in electric-sector consumption of natural gas came from the Midcontinent and Texas, which declined week-on-week by 34% and 58%, respectively. In the Midwest, power sector consumption declined by only 0.3%, after increasing by 183% the previous report week, with temperatures there staying 43% below levels from two weeks ago. Net pipeline exports to Mexico rose 5.7%, due to higher exports from the Southwest, while exports from Texas remained relatively flat.
Total supply recovers over the week. Total natural gas supply rose by 1.2% for the report period. Domestic dry gas production increased by 1.6% above week-ago levels, after declining by 3.4% last week following widespread well freeze-offs concentrated largely in the southwestern United States. Net imports from Canada declined by 3.9%, driven by a 31% decline in Canadian gas imported into the Midwest. LNG imports, a minor part of supply, were up 42%, with a large part of the increased sendout coming from the Distrigas LNG terminal in Everett, Massachusetts.
Gas storage sees record high net withdrawal. The net withdrawal reported this week was 285 Bcf. The previous record withdrawal was 274 Bcf in January 2008. The previously largest recorded December withdrawal was 208 Bcf, in December 2000. December withdrawals have averaged 109 Bcf per week since 2008. This week’s withdrawal is 215 Bcf larger than last year’s withdrawal of 70 Bcf and 152 Bcf larger than the 5-year average withdrawal of 133 Bcf. Current inventories totaling 3,248 Bcf are 488 Bcf (13.1%) less than last year at this time, and 261 Bcf (7.4%) below the 5-year (2008-12) average.
Net withdrawal is significantly larger than market expectations of 264 Bcf. At 10:30 a.m., when the EIA storage report was released, prices for natural gas futures on the Nymex increased by 7 cents/MMBtu. In the hour following the release, prices climbed an additional 6 cents/MMBtu, to just under $4.44/MMBtu.