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US spot natural gas prices decline YOY across the board in August

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US spot natural gas prices decline YOY across the board in August

The average price of natural gas for day-ahead delivery unraveled in all regions of the U.S. in August versus the prior year, as ongoing production growth combined with diminished cooling demand.

The Western U.S. continued to lead the decline in spot gas pricing in August with a 36.1% decrease year over year to $1.762/MMBtu, also the lowest valued index for the month. Next-day gas prices fell by approximately 30.0% elsewhere in the country to average in the low $2s per MMBtu on the Gulf Coast and in the low to mid-$1.90s per MMBtu in the Mid-Continent and Northeast.

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The U.S. Energy Information Administration's latest Drilling Productivity Report anticipates a 0.73 Bcf/d growth in shale gas production month over month to a total of 81.60 Bcf/d in September, despite projected declines in the output of Anadarko and Eagle Ford basins.

As supply is expected to remain robust, recent demand has been lackluster. Population-weighted cooling degree days for the four-week period ended Aug. 31 was down 6.6% from the prior year for the U.S. as a whole, according to National Oceanic and Atmospheric Administration data.

At the hub level, percentage losses were likewise observed across the board, with the more significant reductions occurring in the Western U.S. Although SoCal Citygate had the highest valued August spot gas index nationwide at $2.892/MMBtu, it logged the largest percentage decline of 68.5% year over year. PG&E Gate had the second-highest valued index at $2.634/MMBtu, yet still notched a 20.8% decrease year over year.

Other notable price changes in the Western U.S. were the 57.3% drop in the Waha Hub average to 87.3 cents/MMBtu, the 48.0% downswing in the El Paso Permian index to $1.058/MMBtu and the 42.5% slump in El Paso - S Mainline average to $2.570/MMBtu.

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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.