Natural gas prices (Henry Hub spot) continue their downward trend with no end in sight. During January natural gas spot price fell by 10.74% and the future price (February delivery) declined by 10.7%. The late arrival of winter in the U.S. mainly in the Northeast region and the substantially higher than normal natural gas storage quotas may be among the key factors in keeping natural gas prices very low for the season.
Here is a short review of the changes of natural gas price for the week ending on January 13th, the second week of 2012:
Natural Gas Price January – Weekly Review and Analysis
Nymex Henry Hub Future Price (short term delivery) sharply declined during last week by 12.75% and reached on Friday $2.69 /mmbtu; its average daily change was -2.67%, and its weekly average price was 6.75% below the previous week’s average price.
Natural gas price (Henry Hub spot) also sharply fell by 7.32% during the week, and its average price was 4.49% below last week’s average price.
The difference between the Henry Hub future and spot, i.e. future price minus spot price (if the spot prices are higher than the future prices its called Backwardation, if future price is higher than its called Contango) continued to be in Contango during most of the week; by Friday the gap fell to $0.02/mmbtu, i.e. Contango.
Natural Gas Charts
The following charts present the daily changes of natural gas (Henry Hub) and futures (Nymex Henry Hub) in $/mmbtu during January 9 to January 13.
The first chart shows the changes of natural gas price (Henry Hub future and spot) during the week: the natural gas price (spot and future short term delivery) continued to sharply decline during the week.
The second chart presents the daily percent changes of natural gas price (spot and Nymex future). The sharpest decrease in the natural gas price (future) came on Thursday, while the Henry Hub future price rose on Monday by nearly 3%.
Natural Gas Storage Weekly Update – EIA Report:
During last week, the underground natural gas storage (Billion Cubic Feet) by 2.74% and reached 3,377 billion cubic feet for all lower 48 states; the current natural gas storage is 17% above the 5-year average, and also 13.4% above the storage level during the same week in 2011. The higher than normal levels of storage might explain the ongoing decline in natural gas prices during 2012.
For further reading: