While most price increases across the country were somewhat moderate, a heat wave in the Northeast led to substantial jumps in prices as consumers used natural gas via electric generation for cooling. At Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City, prices rose $2.32 per MMBtu, from $5.03 last Wednesday to $7.35 yesterday. From Tuesday to Wednesday, the New York City price jumped $1.27 per MMBtu. At many other trading locations in the Northeast, prices behaved similarly, increasing more than a dollar on the week. The differential between the New York price and the Henry Hub price, as well as the difference between the Boston price and the Henry Hub price, spiked in the last few days of the report week.
The heat in the Northeast led to a marked increase in Canadian pipeline imports to the area. While Canadian imports to the Midwest and West fell on the week, according to data provided by BENTEK Energy Services, LLC, pipeline imports to the Northeast rose 17.6 percent from the previous week. On Wednesday, June 8, Canadian imports to the Northeast totaled 1.6 Bcf, a sharp uptick from the weekend levels below 500 million cubic feet (MMcf). The increase in Canadian imports to the Northeast, as well as increases in flows from the Southeast, was spurred by the increase in Northeast prices relative to other areas.
Natural Gas power burn for the total Lower 48 States rose 7 percent week over week, driven by gains in the Northeast, Midwest, and Southeast. West power burn remains relatively low, as the Bonneville Power Administration has put into place a curtailment policy for the Pacific Northwest on thermal and wind generation, in response to large amounts of hydro resulting from runoff from the largest snowpack in years. Natural gas supply this week remained high, though dropping slightly from last week. Production fell less than one-half of one percent, but levels remained above 64 Bcf per day, according to BENTEK data. LNG sendout dropped close to 27 percent from the previous week, as sendout from the Golden Pass facility declined from its level of more than 700 MMcf per day seen the past couple of weeks.
Warm temperatures prevailed across most of the rest of the country, though price increases were not nearly as robust as they were in the Northeast. In Chicago, for example, temperatures reached into the 90s on Tuesday, and the Chicago Citygate price hit $5.02 per MMBtu, an increase of 30 cents from the previous week. As temperatures cooled off the next day, the price dropped back down to $4.92 per MMBtu.