NGI Weekly Gas Price Index

A reclassification of “base” gas to “working” and a cooler-than-expected August make for an end-of-injection season storage forecast that is 20 Bcf higher than the one issued last month in the Energy Information Administration’s (EIA) Short Term Energy Outlook (STEO), the agency said last week.

Nationally physical gas prices fell a nickel on average for the week ended Sept. 13. Gains were largely limited to the Northeast and the majority of points fell anywhere from a few pennies to double digits. Deliveries to the Algonquin Citygates were the week’s largest gain at 45 cents to $4.23 and the greatest declines were seen on El Paso S Mainline at 20 cents to $3.81.

For the week ended Sept. 6 the national physical gas average price was $3.65, up 11 cents. Most market points — with the exception of a handful of spots in the Northeast, Midwest, and Midcontinent — added a dime or more.

Mild summer temperatures have masked bullish signals for the U.S. natural gas market, with industrial demand aggressively growing and net imports dropping more steeply than expected, according to Barclays Capital. However, onshore natural gas production still is on the upswing and likely will dictate prices.

The Western Gulf of Mexico (GOM) Lease Sale 233, which last week offered for bid 20.7 million acres offshore Texas, yielded fewer offers and lower total high bids than in the past, with 12 operators making 61 offers for 53 blocks that covered just more than 300,000 acres, Bureau of Ocean Energy Management (BOEM) officials said.

For the Monday-Thursday week preceding the extended Labor Day holiday weekend natural gas prices nationally averaged a nickel gain to $3.54 with most regions adding anywhere from a nickel to 9 cents.

The Energy Information Administration (EIA) reported last week that while end-of-refill-season working natural gas storage levels are expected to be ample, inventories could enter November at the lowest level in three years.

For the week ending Aug. 23 physical natural gas prices nationally rose on by 18 cents to average $3.49, according to NGI’s National Spot Gas Average. All regions were up by double digits, and only a few points gained less than a dime.

Physical natural gas trading at most points for the week ended Aug. 16 was limited to gains of less than a nickel. Only a handful of points drifted into the loss column, and the biggest gains were limited to the Northeast. Locations in the transportation and infrastructure-challenged Marcellus scored nearly $1 gains, with gas at Transco-Leidy Line rising 86 cents to $2.43 and deliveries on Tennessee Zone 4 Marcellus jumping 86 cents as well to $2.30. Regionally the Northeast led the pack with an advance of 23 cents to $3.19.