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FUELS EIA N E W S 18 FEBRUARY 2016 | FUEL OIL NEWS | www.fueloilnews.com Natural gas spot prices in 2015 at the Henry Hub in Louisiana, a national benchmark, averaged $2.61 per mil- lion British thermal unit (MMBtu), the lowest annual average level since 1 9 9 9 . D a i l y p r i c e s f e l l b e l o w $ 2 / MMBtu this year for the first time since 2012. Henry Hub spot prices began the year relatively low and fell throughout 2015, as production and storage inventories hit record levels and fourth-quarter temperatures were much warmer than normal. Natural gas prices at key regional trading hubs ended the year lower than their starting point. At northeastern locations, where natural gas transmis- sion infrastructure is often constrained, prices spiked in the early months of 2015, which were colder than normal compared to much of the United States. Prices at the Algonquin Citygate, which serves Boston, and at Transcontinental Pipeline's Zone 6, which serves New York City, began the year much higher than the Henry Hub spot prices in early 2015, but then fell below the national benchmark for much of the rest of the year. The annual average spot price at Henry Hub of $2.61/MMBtu was $1.78/MMBtu, or 41%, lower than the 2014 average. Despite declining prices, total natu- ral gas production, measured in terms of dry gas volume, averaged an esti- mated 74.9 billion cubic feet per day (Bcf/d) in 2015, 6.3% greater than in 2014. This increase occurred even as the number of natural gas-directed drilling rigs decreased. As of December 18, there were 168 natural gas-directed rigs in operation, only about half the number of rigs at the beginning of 2015, according to data from Baker Hughes Inc. However, the remaining rigs are among the most productive, and producers have continued to make gains in drilling efficiency. Low prices and strong production led to increased use of natural gas for electric power generation, which is pro- jected to be about 26.5 Bcf/d in 2015, exceeding the 24.9 Bcf/d level in 2012. Average Annual Natural Gas Spot Price in 2015 Was At Lowest Level Since 1999 Principal contributor: Katie Teller Source: Bloomberg L.P. Monthly and annual average natural gas spot price at Henry Hub (1996-2016) dollars per million British thermal unit 14 12 10 8 6 4 2 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 $2.61 monthly average annual average Source: Bloomberg L.P. Commodity futures price changes (January 2—December 31, 2015) percent change -50% -40% -30% 20% -10% 0% NOTE: These commodities are included in the S&P GSCI Energy, Grains, Industrial Metals, and Precious Metals indices. All price changes reflect changes in front month futures contract price for each commodity. WTI is West Texas Intermediate, RBOB is reformulated gasoline blendstock for oxygenate blending, and ULSD is ultra-low sulfur diesel. industrial metals precious metals grains energy lead corn gold RBOB (gasoline) silver soybeans aluminum wheat natural gas copper zinc WTI Brent gasoil ULSD nickel