Natural Gas Bidweek Prices Tackled For a Loss; NGI Proposes Utility Breakout of Chicago Quote

DULLES, Va.--()--Natural gas bidweek prices must have taken a page or two from the petroleum playbook as February quotes slid across the country. Only a handful of points managed gains, and losses of 25 cents to 50 cents were common, according to Natural Gas Intelligence (NGI).

“We were trading unchanged just before the number came out, and this thing fell out of bed once the number was released”

The lack of sustained cold combined with robust natural gas supplies resulted in weak prices for monthly supplies. The NGI February National Bidweek Average slipped 32 cents to $3.23 (download a copy of the February NGI Bidweek Survey here). Taken as a whole, the Northeast region suffered the least, dropping only a penny month-to-month to average $4.32. It was the best of times and the worst of times in that region, however, as losses at Tennessee Zone 6 200L (down 77 cents to average $10.29) were offset by gains of $1.16 at Transco Zone 6 New York and 78 cents at Tetco M-3 to average $9.60 and $5.13, respectively.

The West Coast and mid-section of the country took the biggest hits with California dropping 43 cents to $2.87 and the Midwest, Midcontinent, and Rocky Mountains sliding 49 cents, 47 cents, and 46 cents to $3.04, $2.75, and $2.66, respectively. NGI’s Chicago Citygate, which combines deals into the four major Chicagoland LDCs, fell a whopping 59 cents to average $3.02 for the month.

NGI put out Monday a call for comments for a proposal to post -- in addition to its existing Chicago Citygate index -- breakout price information for gas delivered to each of those utility distributions systems. NGI’s Chicago Citygate is a weighted average of transactions delivered into Nicor Gas, NIPSCO, North Shore, and Peoples, so providing separate detail for these four LDCs will in no way impact how NGI calculates the existing Chicago Citygate index. It is simply a way to provide additional detail behind NGI’s Chicago index. For more information on the call for comment, please visit natgasintel.com/pricenotice.

The South Texas bidweek average came in 35 cents lower at $2.76, and South Louisiana was off 32 cents to $2.83. East Texas fell 29 cents to $2.78.

February futures settled at $2.866, down sharply from January's settlement at $3.189.

The tone of bidweek was largely reflected in last Thursday's Energy Information Administration (EIA) Storage report as the bearish figure raised as many questions as it answered, and the actual figure came in well under expectations. The EIA announced a withdrawal from storage of just 94 Bcf, about 20 Bcf less than market expectations, and prices fell hard. At the close, the newly minted spot March futures contract took a 12.3-cent drubbing Thursday to finish at $2.719, and lost another 2.8 cents on Friday to $2.691.

With nine weeks remaining on the traditional withdrawal season, slightly less than 100 Bcf would have to be pulled weekly to bring supplies under the arguably bearish ending inventory level of 1,700 Bcf.

All indications were that the figures for the week ended Jan. 23 would cause an increased surplus relative to a year ago and diminish the year-on-five-year deficit. However, the best minds in the business missed the mark as the number came in far less than what traders were anticipating.

"We were trading unchanged just before the number came out, and this thing fell out of bed once the number was released," said a New York floor trader.

About NGI

Natural Gas Intelligence (NGI), operating under the corporate entity of Intelligence Press, Inc., is the publisher of the NGI family of newsletters--a leading provider of news and physical market pricing information for the deregulated North American natural gas industry. Since the first issue of the Natural Gas Intelligence newsletter published in 1981, NGI has provided information and data relied upon daily by thousands of industry participants in the U.S., Canada and Mexico as well as Central and South America, Europe and Asia.

NGI’s Bidweek Price data, published since 1988, is used each month by thousands of industry participants in supply contracts and pipeline tariffs approved by FERC. NGI has also been publishing Daily price index data since 1993. Recently, Tennessee Gas Pipeline effectively endorsed NGI’s daily indexes by adopting, with FERC approval, 12 pricing points from Natural Gas Intelligence’s (NGI) Daily Gas Price Index for calculating cash-outs on its system, replacing broader indexes from other sources. Tennessee said the changes were requested by certain shippers and noted that “Natural Gas Intelligence publishes multiple region-specific indices, which reflect the market-determined pricing points prevailing on Tennessee’s system.”

Download a free copy of the February NGI Bidweek Survey here: naturalgasintel.com/bidweek-feb2015.

For free trial access to NGI’s Daily Gas Price Index, visit naturalgasintel.com/trial.

For more information about NGI products or services, visit our website at naturalgasintel.com or contact James Geanakos at 703.318.8848 james.geanakos@natgasintel.com

Contacts

Natural Gas Intelligence (NGI)
James Geanakos, 703.318.8848
james.geanakos@natgasintel.com

Release Summary

Natural Gas Bidweek Prices Tackled For a Loss; NGI Proposes Utility Breakout of Chicago Quote

Natural Gas Intelligence (NGI)