The price of natural gas bounced back from its recent tumble. The average weekly price was still 1.1% lower than the previous week. In the latest EIA report, the natural gas storage decreased by 287 Bcf. Last week’s extraction was higher than last year’s and the five year average rate. The ongoing high volatility in the natural gas market might continue due to the sharp shifts in the U.S weather.
The Nymex Henry Hub Future (short term delivery) rose by 6.87% and reached by Friday $4.34/mmbtu; its average daily change was 1.34%; its weekly average rate was 3.82% above last week’s average price.
The difference between the NG future and spot prices – future minus spot – shifted from Backwardation to Contango during last week.
Natural Gas Charts
The following charts show the changes in Nat-gas future (Nymex Henry Hub) in $/mmbtu during January 13-17.
In the second chart are the daily percent shifts of the Nymex Henry Hub future (short term delivery).
The underground natural gas storage (Billion Cubic Feet) decreased again for the ninth consecutive time this season during last week by 10.2% or by 287 Bcf; the storage reached 2,530 billion cubic feet for all lower 48 states; the current storage is 15% below the 5-year average and is also 20.7% below the storage during the same week in 2013. The recent extraction was lower than last year and than the five year average: During the same week in January 2013the natural gas extraction was 148 Bcf, and the five year average extraction from storage for the same week of January was 192 Bcf. This week’s extraction was mostly due to the eastern consuming region, in which the extraction was 149 Bcf.
Weather and natural gas
The current forecasts are that the temperatures are expected to plummet to below than normal levels in the Northeast and most of the East of the U.S but remain above normal in the West coast. Considering the expected lower than normal temperatures for the season; the demand for natural gas in the residential/commercial sector in many parts of the U.S. could sharply rise in the near future. Conversely, during last week’s heating degrees days were estimated to be lower than normal and last year’s.
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