Despite a 31 percent decrease in the number of operational natural gas exploration rigs, the Energy Information Administration (EIA) reports that the US achieved the largest ever net weekly natural gas injection level: 132 billion cubic feet (Bcf). A combination of increased production, increased imports and moderate power burn resulting from moderate weather have driven the record injection levels.
As a result, wholesale (Henry Hub) gas prices have fallen from $4.62 per MMBtu at this time last year to $2.64 as of June 3 according to EIA data. Prices at Boston’s Algonquin terminal tumbled from $2.50 to just $1.20 last week, while New York prices fell from $2.38 on June 1 to just $1.67 on June 3. Prices at other gas terminals (Henry Hub, Chicago, and the three hubs making up the California Composite Average) ranged from $2.58 to $2.66 over the course of the week.
EIA posted a chart that shows how gas prices have remained low since 2009 despite a massive drop off in the count of gas exploration rigs beginning in late 2008. Low gas prices have helped to keep power prices down as well, as they are one of the primary drivers of electricity prices, especially in deregulated electricity markets.