Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas

Analysis: Appalachian gas traders brace for likely slump in autumn prices

LNG | Natural Gas | Natural Gas (North American)

Gastech puts LNG at center stage as market presses North American project developers for decisions

Natural Gas | Oil

Platts Wellscape P2P

Commodities | Energy | Electric Power | Emissions | Renewables | Natural Gas | Natural Gas (North American)

Northeast Power and Gas Markets Conference, 14th Annual

Oil | Crude Oil | Oil Risk

Saudi attacks, supply risk could cause prices to test $80/b: S&P Global Platts Analytics

Analysis: Appalachian gas traders brace for likely slump in autumn prices

Highlights

September, October forward basis approaches 80-cent discount

Marcellus/Utica production surpasses 33 Bcf/d in late August

Denver — Appalachian Basin natural gas prices are likely in for another shoulder-season slump this year as waning seasonal demand meets with recent gains in production and rising utilization on key outflow corridors.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

On Friday, forward basis at Dominion South for September and October sank to minus 77 cents/MMBtu and minus 75 cents/MMBtu, respectively. The most recent autumn forward price assessments are down sharply from a roughly 50 cents discount to the benchmark in mid-August, Platts M2MS data shows.

Weaker forwards come as Appalachian gas traders brace for a lengthening market in the weeks ahead.

In September, power burn demand across the US Northeast should dip to about 8.6 Bcf/d, a 1 Bcf/d, or 10%, decline from the August average, according to data from S&P Global Platts Analytics.

In October, power demand will decline even further to about 7.8 Bcf/d before consumption from the residential-commercial sector begins lifting Northeast demand-side fundamentals.

At the same time, Appalachian Basin gas production has continued pushing upwards. Just last week, output from the Marcellus and Utica shales combined climbed to a new record high at over 33 Bcf/d.

OUTFLOW CORRIDORS

Shoulder-season price declines in the Appalachian Basin are nothing new.

Over the past two years, cash prices at Dominion South have been notably weaker from late September to mid-October, falling to as much as a $2.50/MMBtu discount to Henry Hub.

In 2017, high utilization on existing production takeaway pipelines kept prices depressed for an extended period with Dominion South basis averaging minus $1.73/MMBtu in September and minus $2.08/MMBtu in October.

Last year, the selloff at Dominion South was more short-lived, only lasting about two weeks.

Shoulder-season service startups on Transcontinental Gas Pipe Line's Atlantic Sunrise expansion and Enbridge's Nexus Gas Transmission project were key -- along with an early uptick in heating demand -- in helping to lift Dominion South basis out of the doldrums.

This autumn, though, no additional production takeaway capacity is scheduled to enter service.

In fact, according to Platts Analytics, utilization on some of the region's key production takeaway corridors is now approaching capacity.

Since the start of August, flows on Rockies Express have averaged over 2.8 Bcf/d, or less than 100 MMcf/d shy of the pipeline's outbound flow capacity.

Even on Nexus Gas Transmission, which was not fully contracted on its entire firm capacity at startup, flows have averaged about 1.2 Bcf/d, or about 90% utilized, since August 1.

Over the same period, flows on Tennessee Gas Pipeline's 100-leg have averaged about 88% utilized and on Columbia Gas Transmission's AlexSeg over 99% utilized, Platts Analytics data shows.

-- J. Robinson, jrobinson@spglobal.com

-- Eric Brooks, ebrooks@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com