On Wednesday, some pricing points in New England showed price increases, the exception to posted double-digit price declines across the rest of the country. The New England region is expected to see some colder temperatures in the coming days. On Wednesday, the price at the Algonquin Citygate, which serves Boston markets, increased 29 cents to $3.39 per MMBtu. However, despite the increase on Wednesday, the Algonquin Citygate price posted a net loss of 51 cents per MMBtu over the report week, and remains far below the price at the same time last year—o n February 1, 2011, prices for the Algonquin Citygate ended the day at $6.76 per MMBtu. Price increases yesterday were by and large only in New England, with the rest of the Northeast posting declines. The spot price at Transcontinental Pipeline’s Zone 6, for delivery into New York City, fell 22 cents yesterday, to end the week at $2.70 per MMBtu, 48 cents per MMBtu below last Wednesday’s level.
An exception to the warm, mild winter has been in the Pacific Northwest. In the area, winter has been colder than expected, and power generators have been relying on natural gas for power generation more so than last year, according to analysis and data by BENTEK Energy, LLC (Bentek). In addition, the winter has been drier than normal, which could result in increased natural gas use in the power sector in the summer, as a result of reduced hydropower. Natural gas imports to the West from Canada increased this week, and were above the same week last year by 4.5 percent. But despite the relatively cold weather in the Pacific Northwest, prices remain relatively low. This week, the price at the Sumas trading point, located in Washington State, fell 28 cents to $2.50 per MMBtu.
Supply this week was flat, while demand fell. According to Bentek estimates, dry production rose 0.1 percent, but remains above year-ago levels. Imports from Canada increased slightly, with an increase in imports to the West accounting for most of the increase. LNG imports continued to remain relatively low, falling 12.4 percent from the previous week. Total consumption fell by 13.6 percent, with declines in all major sectors. Residential and commercial demand showed the largest decline, which was related to this week’s warm weather. Power demand and industrial demand also posted week over week declines, which were likely weather-related.
At the New York Mercantile Exchange, the price of the March 2012 natural gas contract declined from $2.769 per MMBtu last Wednesday to $2.382 per MMBtu yesterday. The March 2012 contract moved into the near-month position as February 2012 expired on January 27 at $2.678 per MMBtu. While still low compared to recent years, the February contract eked out some gains during its last week of trading.