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Henry Hub spot gas prices fall to 3-year low despite rise in LNG exports

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Spot gas prices at the U.S. benchmark Henry Hub in Louisiana have fallen to their lowest level in the past…

Spot prices at the national benchmark Henry Hub in Louisiana averaged $2.57 per million British thermal units in the past year, about 60 cents per MMBtu lower than in 2018 and the lowest annual for three years. According to EIA figures, monthly average natural gas prices at most key regional trading hubs in 2019 reached their highest levels in February, and they were relatively low and stable from April through December. 

In the US Northeast, additional imports of LNG into New England limited price spikes during the winter of 2018-2019.

Despite a cold snap in the Midwest in February 2019, natural gas prices at Chicago Citygate were lower than during previous extreme weather events. “However, in the Pacific Northwest, unseasonably cold weather at the end of winter coupled with regional supply constraints and decreased storage inventories led to significant price spikes at the Northwest Sumas hub in March,” analysts commented.

Exports keep growing

Natural gas exports - both by pipeline to Mexico and as LNG - continued to grow. U.S. natural gas exports to Mexico by pipeline averaged 5.1 billion cubic feet per day in the first 10 months of 2019, 0.4 Bcf/d more than the 2018 average.

Most of the new pipelines placed in service in 2019 were located in the South Central and Northeast regions. Analysts noted these pipelines provide additional takeaway capacity out of the Permian and Appalachian supply basins and will serve growing demand for LNG exports, pipeline exports to Mexico and US natural gas-fired power generation.

Additional pipeline takeaway capacity in the Permian region eased some infrastructure constraints and increased regional prices at the Waha hub in western Texas after six consecutive months of prices lower than $1 per MMBtu (March through August).


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