Natural Gas Declined to $4.3

The price of natural gas moved in an unclear trend during last week. Despite this unclear trend, the price of natural gas ended the week close to $4.3 – lower than the previous week’s price. In the latest EIA report, the natural gas storage declined again by 97 Bcf. Last week’s extraction was lower than the five year average rate and last year’s. The recent high volatility in the natural gas price might continue due to the weather changes in the US.

The Nymex Henry Hub Future (short term delivery) declined by 2.34% and reached by Friday $4.30/mmbtu; its average daily change was -0.45%; its weekly average rate was 2.81% below last week’s average rate.

The difference between the NG future and spot prices – future minus spot –mostly remained in Backwardation during the previous week.

Natural Gas Charts

The following charts show the changes in Nat-gas future (Nymex Henry Hub) in $/mmbtu during December 30- January 3.

Natural Gas price  chart -December 30 January 3 2014
As you can see in the chart herein, the natural gas price (Henry Hub future rate) tumbled down on Tuesday only to bounce back on Thursday and Friday.


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

Natural Gas chart - percent change December 30 January 3 2014

The underground natural gas storage (Billion Cubic Feet) decreased again for the seventh consecutive time this season during last week by 3.16% or by 97 Bcf; the storage reached 2,974 billion cubic feet for all lower 48 states; the current storage is 8.9% below the 5-year average and is also 15.9% below the storage during the same week in 2012. The latest extraction was lower than the five year average: During the same week in December 2012 the natural gas extraction was 135 Bcf, and the five year average extraction from storage for the same week of December was 135 Bcf. This week’s extraction was mostly due to the eastern consuming region, in which the extraction was 67 Bcf.

Weather and natural gas

The current projections are that the temperatures are expected to be higher than normal levels throughout the U.S mainly in the East Coast. Considering the expected rise in temperatures for the season; the demand for natural gas in the residential/commercial sector throughout the U.S. is likely to drop in the near future. Finally, the heating degrees days are estimated to be slightly higher than normal but moderately lower than last year’s. These factors could keep the volatility of the price of natural gas elevated.

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