Natural gas continued to trade down during most of the last week of 2011. On the other hand, natural gas storage level continues to decline, but the natural gas storage levels continue to be well above the levels recorded in recent years.
Here is a summary of the recent U.S natural gas market info collected by the EIA for the week ending on December 30th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) fell for the sixth consecutive week; last week by 2.14% or by 76 Bcf; the natural gas storage reached 3,472 billion cubic feet for all lower 48 states; the current natural gas storage is 15.2% above the 5-year average, and is 11.4% above the storage level during the same week in 2010. The higher than normal levels of natural gas storage might explain the drop in natural gas prices during December.
The sharp decline in storage was primarily due to a 62 Bcf extraction from the Eastern region natural gas storage.
In the following chart are the developments of natural gas storage (weekly figures) and Henry Hub natural gas prices during 2011. During last week the Henry Hub spot price remained at a weekly average price of $3.04/mmbtu. The Henry Hub price was $1.12/mmbtu below its price level the same week in 2010.
The average U.S natural gas consumption, on a national level, increased by 3.2% (week over week) during last week. The residential/commercial sectors led the rally with a 3.2% increase. The 2011 consumption in the residential/commercial sector is still 10.82% below the levels in 2010.
Production and Imports
Imports of natural gas from Canada changed direction and increased during last week by 2.31%; the imports were also 9.51% below the levels in 2010.
The gross natural gas production on the other hand slightly fell during last week by 0.15%, but is still 8.39% above the production level in 2010. As a result the total supply of natural gas rose by 0.24% during last week.
On a national level, the US temperatures were 4.9 degrees warmer than 30-year normal, and 6 degrees warmer than last year. The warm season is probably among the factors keeping natural gas prices low for the season.
Prices for the Week Ending December 30th
Nymex Henry Hub Future Price (short term delivery) sharply declined during the week by 3.86% and reached on Friday $2.99 /mmbtu; its average daily change was -0.97%, and its weekly average price was 2.16% below the previous week’s average price.
To sum up, natural gas consumption and imports increased , natural gas storage and production declined and weekly average natural gas prices remained unchanged during the week of December 30th.
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