Natural gas for day-ahead delivery in the western U.S. lost more than one-third of its value in July 2019 compared to July 2018, leading percentage declines in spot gas pricing for the third month in a row.
The Midcontinent, Gulf Coast and Northeast saw day-ahead natural gas prices fall by between 18.0% and 23.0% from year-ago levels. In the West, the largest observed percentage drop of 35.8% took the index to its lowest value relative to other regions at $1.792/MMBtu.
Weaker cooling demand and growing shale production combined to drive bearish influence for the month across the country.
Data from the National Oceanic and Atmospheric Administration shows population-weighted cooling degree days for the four-week period ended July 27 were 29.9% lower than in the year-ago period for the Pacific region and 2.6% lower on a nationwide basis.
In terms of supply, the U.S. Energy Information Administration's latest Drilling Productivity Report estimates U.S. shale gas production will approach 82.0 Bcf/d in August, from 81.2 Bcf/d in July.
At the hub level, SoCal Citygate and PG&E Gate in the western U.S. had among the highest valued July spot gas indexes nationwide at $2.726/MMBtu and $2.621/MMBtu, respectively, yet still reflected losses of 71.6% and 12.9% year over year. The largest percentage decline among hubs nationwide was also observed in the region, at 78.9% for the Waha Hub, where spot gas pricing averaged at 46 cents/MMBtu.
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