Gas prices fall despite cold weather– weekly recap January 24-28

Natural gas spot price

The snowfall came back to the East coast of the US, resulting in higher prices for New York dwellers during the end of last week. On the other hand, The Henry Hub (spot and future) continued their descent as January is closing up and expectations are that there will be an ongoing decline in these energy commoditisers’ prices.

Let’s check out the main figures for this passing week of January 24-28:

This passing week’s average NY gate natural gas spot price fell by 29.4% compare to last week’s average price, however, the cold weather and snowfall during the middle of the week caused a hike in demand and consequentially the NY city gate natural gas spot price, rose sharply by over 34% from beginning to the end of the week to reach 9.4$/mmbtu (which is still much lower than the high prices during last week of almost 16.77$/mmbtu); its average daily change was -4.3% during the week.

Natural gas spot price (Henry Hub) had a stable decent during the week, as it reached over the weekend 4.29$/mmbtu – a 9.11% fall from beginning to end of the week. On average, it fell by 1.87% on a daily basis, and the average weekly price is 2.6% below the average weekly price in the previous week.

The Nymex Henry Hub Future Price (February delivery) also declined, but by 5.68% from beginning to end of the week; and its average price was 3.7% loswer than last week’s average price.

During the month of January, Henry Hub future price fell by 7.1% while spot price decreased by 5.5%; furthermore, currently the contango between spot and future is only 3 cent/mmbtu.

table natural gas spot price - 24-28 of January* This figure is calculated based on the percent change from the price at the beginning of the week compare to the price at the end of the week

Natural gas price chart

The following chart show the changes of natural gas spot price (Henry Hub) and futures price (Nymex Henry Hub) in $/mmbtu for this passing week:

natural gas price chart - 24-28  of January

The final graph shows the natural gas spot price (Henry Hub) and futures price (Nymex Henry Hub) daily percent change ranging between a 0.4 percent incline for Nymex Henry Hub, and a -5.5 percent decline at the beginning of the week for Henry Hub spot prices.

natural gas price chart - percent change 24-28 January

Natural gas storage, consumption and production – highlights:

Here are the main highlights of the recent EIA weekly report on natural gas: in my last review about U.S. Natural gas storage showed for the week of 21st of January a drop of 6.4% in underground natural gas storage (Billion Cubic Feet), i.e. a decline of over 174 billion cubic feet. This withdrawal of natural gas is higher than the five year average of 152 BcF.

Due to the cold weather (see below) there was an incline in natural gas consumption of 3.4%during the week of January 21st compare to the previous week.  The prime contributors were due to the power and industrial sectors with 1.4% and 4.6% rise, respectively.

Domestic production increased in the passing week by 1.3% compare to the previous week.

The import of Canadian gas also inclined by 4.5% compare to previous week.

In total, consumption, prices, production and imports inclined while natural gas storage declined.

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