Natural Gas Continues to Rise on Low Storage Buildup

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.

Natural Gas price  chart - November 11-15  2013As seen in the chart herein, the natural gas price (Henry Hub future rate) has rallied during most of the week.


In the second chart are the daily percent shifts of the Nymex Henry Hub future (short term delivery).

Natural Gas chart - percent change November 11-15 2013
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.

Henry Hub Natural Gas storage and prices 2013 November 11-15

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.

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