US spot natural gas and futures prices reach lows as LNG feed-gas boosts consumption
US spot natural gas prices have reached their lowest in real terms for almost four years as front-month futures on the New York Mercantile Exchange have also plunged to lows last recorded nearly 20 year ago.
Three natural gas futures and options available for LNG trade feature in CME energy Top 10
CME Group, the world's leading derivatives marketplace, reported its December and full-year 2019 market statistics, showing it reached average daily volumes in energy of 2.1 million contracts per day for products such as crude oil, natural gas and LNG, and now including a new LNG freight future.
US LNG cargoes backed by maximum baseload at Sabine Pass as cold sends domestic prices up
US LNG exports were slightly lower in the past week as natural gas day-ahead and futures prices jumped after colder weather swept across the nation and domestic demand rose along with production.
Eight LNG vessels departed from the export plants, six from Sabine Pass in Louisiana, one from Cove Point in Maryland and one from Corpus Christi in Texas, compared with 10 carriers the previous week, while two other vessels were lifting cargoes through January 17.
“Henry Hub spot prices rose from $2.91 per million British thermal units on January 9 to $3.61 per MMBtu,” said the Energy Information Administration in its weekly report.
The EIA said it estimated that the Sabine Pass LNG facility has been running above 100 percent of its nominal baseload liquefaction capacity in the winter months.
“Annual 2018 utilization at Sabine Pass is estimated at 106 percent of the baseload and 91 percent of peak capacity,” said the report.
“The Cove Point terminal has also run above 90 percent of its baseload capacity in November-December 2018, with an overall utilization of 67 percent of baseload and 62 percent of peak capacity since the facility started operation in March 2018,” added the EIA.
US domestic natural gas spot prices rose at most locations and net withdrawals from working gas in the previous week totaled 81 billion cubic feet.
“Working natural gas stocks are 2,533 Bcf, which is 3 percent lower than the year-ago level and 11 percent lower than the five-year (2014-2018) average for the week,” said the report.
“Below-freezing temperatures across most of the Northeast led to higher prices,” it added.
Prices at the Algonquin Citygate serving Boston rose by $4.78 per MMBtu from $6.60 per MMBtu to a high of $11.38 per MMBtu.
“Prices at the Transcontinental Pipeline Zone 6 trading point in New York City rose by $2.13 from $3.12 per MMBtu to $5.25 per MMBtu,” said the EIA.
Tennessee Zone 4 Marcellus shale-gas spot prices increased from $2.71 per MMBtu to $3.43 per MMBtu.
Prices at the Pacific Gas & Electric Citygate in Northern California rose $1.20 from $3.42 per MMBtu to $4.62 per MMBtu.
The average total supply of natural gas increased in the week by 1 percent to 94.4 billion cubic feet per day and total US consumption of natural gas rose by 18 percent, averaging 97.2 Bcf/d.
“Natural gas consumed for power generation rose 14 percent. Industrial sector consumption increased 5 percent week over week and in the residential and commercial sectors, consumption increased 30 percent, averaging 46.9 Bcf/d, as winter weather swept through most of the Lower 48 states,” said the report.
Pipeline natural gas exports to Mexico declined by 1 percent, averaging 4.7 Bcf/d.
The US began exporting LNG from the Lower 48 states in February 2016, when the Sabine Pass liquefaction terminal in Louisiana shipped its first cargo.
Since then, Sabine Pass expanded from one to five operating liquefaction Trains, the Cove Point LNG export facility began operations in Maryland and the Corpus Christi Train 1 shipped its first cargo in December 2018.
The EIA estimates that once the remaining three facilities under construction, Elba Island in Georgia, Cameron in Louisiana, and Freeport in Texas come on stream, along with the remaining two Trains at Corpus Christi, US nominal baseload liquefaction capacity will stand at 9.6 Bcf/d, or 72.3 million tonnes per annum, and peak capacity at 10.7 Bcf/d (80.9 MTPA).
Nymex and global platforms owner to develop LNG futures contract for US Sabine Pass plant
CME Group, the US energy and commodities derivatives market leader comprising the York Mercantile Exchange and related platforms, has reached an agreement with Cheniere Energy to develop an LNG futures contract based on physical delivery to Cheniere's Sabine Pass liquefaction and export plant on the Gulf Coast of Louisiana.
US Commodity Futures Trading Commission lists main market impacts of LNG exports
The US Commodity Futures Trading Commission (CFTC) issued a report assessing the market impacts due to the US transitioning from being a net importer to a net exporter of liquefied natural gas.
Forecasts fuel NYMEX
Jan 25 (LNGJ) - US natural gas futures on the New York Mercantile Exchange continued to soar because of forecasts of high natural gas withdrawals in the next storage report on January 25 from the US Energy Information Administration as well as the expected return of cold weather to the East Coast. The NYMEX front-month contract was last at $3.48 per million British thermal units while the US Henry Hub benchmark spot price was at $3.33 per MMBtu. European prices were little changed from seasonal averages, with the UK National Balancing Point price being at the equivalent of $6.80 per MMBtu and the Dutch Title Transfer Facility (TTF) price quoted at $6.50 per MMBtu. Energy prices were underpinned by the North Sea Bent crude oil price hitting $71 per barrel.
US exports six LNG shipments and domestic consumption rises along with Canadian imports
US liquefied natural gas exports from the Sabine Pass plant in Louisiana numbered six vessels in the past week, with a seventh carrier lifting a cargo on November 16 as total domestic consumption rose by 14 percent compared with the previous week and pipeline imports from Canada increased.
