First taste of cooler weather evidenced by uptick in residential/commercial natural gas consumption over last two reporting weeks.
An uptick in residential/commercial natural gas consumption took place over the last two reporting weeks, according to estimates from BENTEK Energy LLC (Bentek) signaling the arrival of cooler temperatures and increased natural gas demand for heating homes and businesses.
The increase in daily consumption began over Columbus Day weekend. Residential/commercial consumption began the last report week on Thursday, October 4 at 13.3 billion cubic feet (Bcf) per day, rising to 16.9 Bcf per day on Friday, October 5. Consumption rose to 20.3 Bcf per day on Saturday, October 6, and peaked at 22.9 Bcf per day on Sunday, October 7, 62.1 percent above the five-year daily average, according to Bentek. This marked the first time that average residential/commercial consumption topped 20.0 Bcf per day in over five months, but it was still well below the 50.0 Bcf per day January average for 2007-2011. Consumption during the last report week averaged 19.2 Bcf per day, a six-month high. For the most recent report week, consumption averaged 17.0 Bcf per day, a decline from the previous week but still significantly above September levels.
This increase in demand took place alongside a cooling in national temperatures. According to National Oceanic and Atmospheric Administration (NOAA), the mean national temperature for the week ending on Saturday, October 13 fell to 54.8 degrees Fahrenheit. This reflected a 7.6 percent decline from the previous week’s national mean temperature of 59.3 degrees Fahrenheit. The biggest drops occurred in the Northeast Climate region, where the mean temperature fell week-on-week by 14.3 percent to 50.0 degrees Fahrenheit, and the East North Central Climate region, where the mean temperature fell week-on-week by 12.0 percent to 44.9 degrees Fahrenheit.
Natural gas spot price changes were mixed over the report week, with large net increases in some Western markets, and some small overall declines at points in the Mid-Atlantic states and the Gulf Coast. The Henry Hub spot price declined 2 cents overall, from $3.26 per MMBtu last Wednesday to $3.24 per MMBtu yesterday. However, the Henry Hub price had edged up to $3.38 per MMBtu on Friday, before falling back down.
Price changes varied widely among the Northeastern states. At Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City, prices remained mostly in the $3.40 - $3.50 per MMBtu range for the report week, beginning the week at $3.46 per MMBtu and ending at $3.43 per MMBtu. On the other hand, New England prices were more varied during the report week. The spot price at the Algonquin Citygate, which serves Boston consumers, swung up to $4.44 per MMBtu in trading on Tuesday, before dropping back to end the week at $3.88 per MMBtu yesterday. Overall, the Algonquin Citygate posted a net increase of 27 cents per MMBtu. The mid-week increases were likely the result of infrastructure constraints on Algonquin Gas Transmission’s system. The 56-cent per MMBtu drop on the last trading day of the report week likely reflected forecasts for mild weather in New England this weekend.