The concerns over the adverse effects of the Mississippi River flooding and the tornados attacks in the US seem to moderately affect the currently low natural gas prices (Henry Hub) as they have risen a bit during the last few days. This recent rally might also been affected by speculation, low volume trading and the high oil prices that drove the consumption for natural gas in the electric sector higher during last week.
Here’s a summary of the recent U.S natural gas market EIA report regarding the week ending on May 20th:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) increased for the seventh straight week, last week by 5.5%; this was a 105 Bcf injection – the highest injection since July 12th 2009; the natural gas storage rose to 2.024 billion cubic feet for all lower 48 states; the natural gas storage is still 1.2% below the 5-year average, and 10.2% below the storage level during the same week in 2010 (see chart below).
This storage increase was mainly because of the injection of 56 Bcf from the Eastern Consuming Region natural gas storage.
The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010 and 2011; the chart demonstrates the rising NG storage and the fall in the NG prices at the first couple weeks of May.
U.S. natural gas consumption rose by 1.8% during the week to an average of 53.8 Bcf; this rise is mainly due to rise in consumption in the electric power sector, which inclined by 19%. This rise is probably related to the high oil prices and the shift from oil consumption to natural gas in the electric power plants.
Production and Imports
The U.S. natural gas production rose last week by 6% and averaged above 64 Bcf/d, and was 5.8% higher than the same week last year.
The imports of natural gas from Canada continued to drop; last week it reached 5.3 Bcf, which was 20.7% below the same time last year.
The US temperatures reached a weekly average of 58.7 degrees, which was cooler than last year by 3.7 degrees, and 3.6 degrees cooler than than the five year average for the week ending on May 9th.
Prices for the week ending May 20th
Natural gas spot price (Henry Hub) declined during the week by 2.04% and reached by Friday 4.05$/mmbtu; its average daily change was -0.05%, and its weekly average didn’t change much and was 0.04% above the previous week’s average price.
The Nymex Henry Hub Future Price (June delivery) also declined by 3.8% during the week, and its average price was 0.67% below last week’s average price.
In total, natural gas storage, prices, production and consumption rose, while imports fell during the week of May 20th.
For further reading:
- Natural gas storage, prices and the Mississippi River, May 19
- Natural gas storage and prices keep on rising | May 13
- Natural gas storage rose for fourth week | EIA review, May 6