WPA Executive Director’s Monthly Price Report

September 2018

Brian Jeffries – Wyoming Pipeline Authority

 

  • The average of the Inside FERC Monthly Index Prices for Colorado Interstate Gas (CIG), Kern River Transmission (KERN), and Northwest Pipeline (NWPL) for September 2018 is $2.29. This basket of index prices is representative of the price of natural gas delivered into the interstate pipeline grid in Wyoming. NYMEX for September 2018 settled at $2.90 yielding a basis differential of MINUS $0.61 per MMBtu. Gas produced in the Rockies continues to suffer from greater Canadian and Permian Basin production thus suppressing prices in markets served by Rockies gas.
  • The index price for gas delivered to the Mid-continent (indicative of the price at the terminus of pipelines such as Cheyenne Plains) in September 2018 is $2.22.
  • The index price for Chicago city-gates (representative of the destination of gas moving on Rockies Express Pipeline) for September 2018 is $2.75.
  • The index price for the Malin Hub at the California/Oregon border (representative of the terminus of the Ruby Pipeline) for September 2018 is $2.37.

 

1 – Natural Gas prices in Wyoming and price differential to the futures market price (NYMEX) for the last 36 months

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2 – Differential in price suffered by Wyoming Natural Gas from January 1993 to the present

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3 – Report of Natural Gas in storage through the week ending August 31, 2018. Gas in storage remains below the 5-yr average which is bullish for prices.

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4 – Temperature deviation from normal forecast for upcoming December-January-February

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5 – Precipitation deviation from normal forecast for upcoming December-January-February

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6 – Chart showing the price differential between Wyoming sweet crude oil as reported to the Energy Information Administration (EIA) and the corresponding monthly average NYMEX WTI crude oil futures prompt month contract through June 2018. Owing to reporting delays in the collection of data on crude oil purchases by the EIA, the data is only available on a three to four month lag.

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7 – Chart showing representative prices throughout the Western US and Canada that serves to highlight the impact of low Canadian and Permian Basin prices on the destination markets for Wyoming produced natural gas. Gas demand in the US Southwest has been very high and thus the pipelines serving California/Nevada/Arizona from the Rockies and from West Texas have been full and price differences across those pipelines (Kern River, Transwestern and El Paso) have been quite wide. In addition, capacity out of West Texas has been highly constrained which has served to further widen the spread in price between West Texas and California.

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