Natural gas prices in the West grew by more than half year over year in December 2018, leading double-digit percentage gains observed over much of the country.
The spot gas price index in the West region jumped from $2.610/MMBtu to $3.936/MMBtu year over year in December 2018 to reflect a 50.8% increase. Gulf Coast and Mid-Continent spot gas pricing followed with gains of 42.5% and 37.1%, respectively, as regional averages moved from the high $2.70s per MMBtu to the low $3.80s and the low $3.90s per MMBtu. Northeast spot gas pricing remained elevated at $4.419/MMBtu but defied the broad uptrend with a 3.4% decline year over year.
The dominant uptick occurred despite some fundamental pressure offered by ongoing growth in shale output and diminished nationwide weather-related demand.
Production of shale gas is seen expanding across all seven key regions and ultimately adding 1.13 Bcf/d in total output month over month in January, bringing overall production from 75.79 Bcf/d to 76.92 Bcf/d, according to the U.S. Energy Information Administration's latest Drilling Productivity Report released Dec. 17, 2018.
Gas home heating customer-weighted heating degree days, a proxy for space heating demand for natural gas, were down 11.1% against normal and off 10.1% year over year in December 2018 on a nationwide basis. In the Pacific region, however, gas home heating customer-weighted heating degree days were 7.0% below the norm but 19.9% higher than in the prior year.
Gains prevailed across gas hubs in the West. Spot gas pricing at PG&E Gate surged 77.3% year over year in December 2018 to $5.192/MMBtu, while PG&E South logged a 40.7% increase over the same period to $3.638/MMBtu. The SoCal Border spot gas index jumped 62.0% over the same period to $4.967/MMBtu, as SoCal Citygate soared 60.6%, to $8.153/MMBtu.
Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.