US Gas Price average at lowest for 15 Years

 Natural gas spot price in the U.S. were at their lowest level last year since 1999, according to a report from the Energy Information Administration (eia). The national benchmark price at the Henry Hub, Louisiana, averaged $ 2.61 per MMbtu, a drop of a whopping $1.78/MMbtu (-40.5%) from 2014 average price. Towards the year end prices fell for the first time since 2012 below the $2/MMbtu, as autumn and early winter temperatures remained relatively high.

Prices in all eight key regional trading hubs, including Henry Hub, declined during 2015. In most of the trading hubs for most of the year, prices were below $3/MMbtu. Spikes in prices were felt only in two regions Algonquin Citygate which serves Boston and Transco Zone 6 NY which serves New York City. In both of them, prices spiked in February to over $15/MMbtu but returned to normal in March. In those 2 north eastern regions, there are often transmission constraints due to infrastructure.

Rigs down, production up

Despite low prices, natural gas production kept growing to a daily average of 74.9 Bcf/d an increase of 6.3% over 2014. However, the number of rigs during 2015 was cut by half to 168 according to the latest report from Baker Hughes Inc. The remaining rigs were among the most productive and producers continued to gain in productivity. The production growth allowed for builds in natural gas inventories which for the first time surpassed the 4,000 Bcf mark the week ending November 20.

More electricity from gas

In five months in 2015 natural gas surpassed coal as the leading source for power generation in the U.S. at a projected average consumption rate of 26.5 Bcf/d, a new record.

During 2015, a few pipeline projects came online particularly from the Midwest to the east.