The price of natural gas changed direction and slightly declined during last week. Despite this drop, the price of natural gas is still hovering above the $4.4 mark. In the latest EIA report, the natural gas storage sharply fell again by 177 Bcf. Last week’s extraction was still higher than the five year average rate and roughly twice as high as last year’s. The recent decline in the natural gas price might continue due to the weather developments in the US.
The Nymex Henry Hub Future (short term delivery) slightly declined by 0.25% and reached by Friday $4.41/mmbtu; its average daily change was -0.05%; its weekly average rate was 2.03% above last week’s average rate.
The gap between the NG future and spot prices – future minus spot – was mostly in Backwardation during last week.
Natural Gas Charts
The following charts present the developments in Nat-gas future (Nymex Henry Hub) in $/mmbtu during December 23-27.
As you can see in the chart above, the natural gas price (Henry Hub future rate) fell mainly on Tuesday and Friday.
In the second chart are the daily percent changes of the Nymex Henry Hub future (short term delivery).
The underground natural gas storage (Billion Cubic Feet) fell again for the sixth consecutive time this season during last week by 5.45% or by 177 Bcf; the storage reached 3,071 billion cubic feet for all lower 48 states; the current storage is 7.4% below the 5-year average and is also 13.1% below the storage during the same week in 2012. The latest extraction was much higher than the five year average: During the same week in December 2012 the natural gas injection was 72 Bcf, and the five year average extraction from storage for the same week of December was 120 Bcf. This week’s extraction was mostly due to the eastern consuming region, in which the extraction was 115 Bcf.
Weather and natural gas
The current outlooks are that the temperatures will sharply fall to below normal levels throughout the U.S mainly in the North. Considering the expected low temperatures for the season; the demand for natural gas in the residential/commercial sector throughout the U.S. is likely to rise in the near future. Finally, the heating degrees days are estimated to be lower than normal and last year’s. These factors could pull back down the price of natural gas.
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