Natural gas continued to trade up during last week. Part of the rally could be attributed to the low storage buildup according to the EIA recent weekly update: the storage buildup was only 20Bcf. Despite the low injection, it was still higher than the five year average. Nonetheless, the recent market reaction might continue on account of expected lower than normal temperatures mainly in the North East in the coming weeks.
The Nymex Henry Hub Future (short term delivery) rose again by 2.84% and reached by Friday $3.66/mmbtu – its highest price in the past month; its average daily change was 0.57%; its weekly average rate was 2.84% above last week’s average rate.
The gap between the NG future and spot prices – future minus spot – was mostly in Backwardation during the previous week.
Natural Gas Charts
The following charts show the developments in Nat-gas future (Nymex Henry Hub) in $/mmbtu during November 11-15.
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) rose again during last week by 0.52% or by 20 Bcf; the storage reached 3,834 billion cubic feet for all lower 48 states; the current storage is 1.5% above the 5-year average but is 2% below the storage during the same week in 2012. The latest injection was higher than the five year average and last year’s: During the same week in November 2012 the natural gas extraction was 18 Bcf, and the five year average injection to storage for the same week of November was only 16 Bcf. This week’s injection was mostly due to the producing region, in which the injection was 12 Bcf.
Weather and natural gas
The current projections are that the temperatures will reach lower than normal levels throughout the East coast. Considering the expected low temperatures for the season, the demand for natural gas in the residential/commercial sector is likely to rise in the coming weeks. Further, the heating degrees days are estimated to be higher than normal and last year’s. These factors are likely to keep the recent rally of the prices of natural gas.
For further reading:
- Is Natural Gas Making a Comeback?
- Exxon & Chevron on the Rise | Chesapeake Continues to Dwindle
- Will This Gas Producer Continue to Rally?
- Will The Recent Rally of Natural Gas Help Chesapeake?