Natural Gas Plunged by 5.8%

The price of natural gas changed course and tumbled down during last week. The average weekly price was also around 2% lower than the previous week. In the recent EIA report, the natural gas storage decreased by 157 Bcf. Last week’s extraction was lower than last year’s but higher than the five year average rate. The recent high volatility in the natural gas price might continue due to the rapid changes in the U.S weather.

The Nymex Henry Hub Future (short term delivery) decreased by 5.83% and reached by Friday $4.05/mmbtu; its average daily change was -1.17%; its weekly average rate was 2.94% below last week’s average price.

The gap between the NG future and spot prices – future minus spot – mostly in Backwardation during last week.

Natural Gas Charts

The following charts show the changes in Nat-gas future (Nymex Henry Hub) in $/mmbtu during January 6-10.

Natural Gas price  chart -January 6-10 2014As you can see in the chart above, the natural gas price (Henry Hub future rate) tumbled down on Wednesday and Thursday.


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

Natural Gas chart - percent change January 6-10 2014The underground natural gas storage (Billion Cubic Feet) decreased again for the eighth consecutive time this season during last week by 5.28% or by 157 Bcf; the storage reached 2,817 billion cubic feet for all lower 48 states; the current storage is 10.1% below the 5-year average and is also 15.8% below the storage during the same week in 2013. The recent extraction was lower than last year but higher than the five year average: During the same week in January 2013the natural gas extraction was 201 Bcf, and the five year average extraction from storage for the same week of January was 128 Bcf. This week’s extraction was mostly due to the eastern consuming region, in which the extraction was 98 Bcf.

Weather and natural gas

The current projections are that the temperatures are expected to be higher than normal levels in the West and parts of the Midwest but below normal in the Southeast. Considering the expected higher than normal temperatures for the season; the demand for natural gas in the residential/commercial sector in many parts of the U.S. could drop in the near future. Conversely, the heating degrees days are estimated to be higher than normal and last year’s. These factors could pressure back up natural gas price.

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