Transco Z6 NY

In the dead of the natural gas winter season when US producers count on strong margins from higher gas prices, the Transco Z6 New York hub is trading on average nearly flat  with U.S. benchmark Henry Hub, LA – the delivery point for the CME NYMEX natural gas futures contract. This is a dramatic departure from historical winter norms in the Northeast market, where prices relative to Henry and just about every other gas hub in the Northeast have traditionally carried hefty premiums in the winter. Moreover, the forward curves indicate these basis levels are the new norm for Northeast pricing. The forward curve for Transco Z6 New York shows basis for 2015 barely above Henry Hub for the year, with several months at more than $1.00/MMBtu discount. Today we look at what’s behind major changes in northeast forward curves.