Natural Gas Market Shifts into Shoulder Season Amid Southeast Heat Lingers
The natural gas market is showing signs of a seasonal shift into shoulder season. According to NGI's price and data analysts, regional premiums to Henry Hub are thinning as demand-constrained markets start to soften. This month, only 22 locations are averaging a premium to Henry Hub at $1.253/MMBtu, while 136 locations are averaging a 51.5-cent discount.
The widening divide between demand-constrained markets and discounted production hubs signals the autumn transition is underway despite lingering Southeast heat. Premiums persist mainly in the Southeast, where cash prices have remained elevated despite seasonal softening in other demand centers. FGT Citygate leads the market with a $3.719 average premium to Henry Hub over the period.
Outside of the Southeast, only SoCal Citygate (97.5 cents) and PG&E Citygate (77.4 cents) are commanding notable premiums to the national benchmark. Meanwhile, Appalachian production locations continue to reflect the structural takeaway constraint that has defined basis in the Marcellus and Utica shales for years.
The US natural gas market basis structure this fall is currently self-contained, with a broad group trading near Henry Hub parity due to shoulder season demand. Of NGI's Daily Datafeed locations with tradable September data, 101 sit 50 cents below Henry Hub, a tight band that spans nearly the entire country outside of the handful of well-known outliers.