GIA contract prices largely fall amid weaker fundamentals

For the second consecutive week, GIA contract prices largely fell over the week ended Feb. 6, as warmer weather led to softened supply-demand fundamentals

Most notably, the Platts-ICE Gas Indexes Americas South contract fell by 49 cents through the week ended Feb. 6, down to a weekly average of $2.41/MMBtu. Southeast and Texas demand levels fell over the same week ended Feb. 6. Average daily Southeast demand fell by about 3.8 Bcf/d or 11.5%, down to 19.13 Bcf/d, while regional production remained relatively flat at about 12.34 Bcf/d. Average daily demand levels in Texas fell to 17.24 Bcf/d, a 1.27 Bcf/d decrease from daily demand levels recorded the week prior.

The GIA Northeast contract fell to $3.04/MMBtu over the same period, representing an 11-cent decrease from the prior week's daily average price. Daily demand levels in the Northeast fell by an average of 2.01 Bcf/d, down to 32.28 Bcf/d as warmer weather in the region decreased gas demand for heating requirements. Northeast production also grew over the same period, averaging 1.28 Bcf/d stronger at 36.57 Bcf/d over the week ended Feb. 6, further loosening regional fundamentals.

The GIA Midwest contract fell by 9 cents, down to a weekly average of $3.07/MMBtu due to similar shifts in supply-demand fundamentals. Total Midwest demand fell by 793 MMcf/d, with the bulk of demand losses stemming from weakened residential-commercial heating demand. Moving opposite the rest of the US, the GIA West contract rose by 16 cents, averaging $2.87/MMBtu over the week ended Feb. 6 as elevated prices in Western Canada brought strength to the overall contract.

Finally, the Platts, part of S&P Global Commodity Insights, North America contract fell by 12 cents, averaging $2.84/MMBtu over the week ended Feb. 6. As a whole, total US demand averaged 119.53 Bcf/d, an 11.195 Bcf/d drop from the prior week, while total US production rose 2.27 Bcf/d, up to 104.89 Bcf/d.

Population-weighted average daily temperatures throughout the US rose by 6.4 degrees Fahrenheit over the past week, which largely softened residential-commercial heating demand.