By contrast, prices in the western and midwestern United States rose over the report week. The Chicago Citygate spot price closed yesterday at $7.89/MMBtu, $1.64/MMBtu above the spot price on Wednesday, February 12. This was likely the result of low storage levels, high weather-driven demand, and a capacity restriction reported yesterday on ANR Pipeline's Muttonville Lateral. This lateral links ANR with the Great Lakes Gas Transmission pipeline. The pipelines transport natural gas imported into Michigan from Canada, as well as gas stored at the Bluewater Gas Storage facility, to the Chicago area and other locations in the Midwest. The Southern California Border Average and PG&E Citygate spot prices also rose by 22 cents/MMBtu and 47cents/MMBtu, respectively, to $5.68/MMBtu and $5.94/MMBtu.
Futures prices surpass $6/MMBtu. Expectations of cold weather, combined with low natural gas storage levels, boosted the near-month contract (for March delivery) past $6/MMBtu for the first time since January 2010. The March 2014 contract rose from $4.822/MMBtu last Wednesday to $6.149/MMBtu yesterday. The price of the 12-month strip (the average of the contracts between March 2014 and February 2015) increased from $4.639/MMBtu to $4.934/MMBtu.
Demand falls in all sectors. Demand for natural gas fell this week across all sectors. Total consumption of natural gas fell to 87.5 Bcf/d, 24% below last week's average of 112.8 Bcf/d, and 3% below the average for the same days in 2013. The decline in demand began last week, after consumption peaked at 125.0 Bcf/d on Thursday, February 6, as the impact of cold weather on that date dissipated. The decline continued through yesterday, when consumption fell to 73.7 Bcf/d.
The largest drop in consumption came from the residential and commercial sector, which fell week-on-week by 18.9 Bcf/d (29.6%), to 44.9 Bcf/d. Natural gas consumption in the power sector (power burn) fell by 6.4 Bcf/d (27.4%) below week-ago levels, to 16.8 Bcf/d. Industrial consumption decreased by 1.0 Bcf/d (4.4%), and natural gas exports to Mexico dipped by 2.9%.
Power burn is down throughout the country. Power burn decreased this week in every region of the Lower 48 states. The largest decreases occurred in the Southeast and Texas, which accounted for 61% of the national decrease from last week's average. Power burn in Texas peaked at the beginning of last week, on February 6, when it reached 7.1 Bcf/d. It then decreased last week, and continued to decrease this week, to 2.6 Bcf/d, 48.3% below week-ago levels. The Midwest, Southwest, Midcontinent, and Pacific Northwest followed a similar pattern as Texas over the past two weeks.