Natural gas prices continue to lose ground as they fell during the week despite the expectations of an increase in domestic demand for natural gas in anticipation for the winter. The recent weekly injection to the natural gas storage was the lowest among the past 32 straight weeks of injections; this may indicate that there might soon be a change in direction.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on November 11th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the thirty-second straight week; last week by 0.5% or by 19 Bcf; the natural gas storage reached 3,850 billion cubic feet for all lower 48 states – the highest stock level since 1993; the current natural gas storage is 6.2% above the 5-year average, and is 0.4% above the storage level during the same week in 2010.
This increase in storage was primarily due to an 11 Bcf injection in the production region natural gas storage.
In the chart below are the weekly changes of natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010-2011; the Henry Hub spot price continued to decline as it did in the past several months; during the second week of November the Henry Hub spot price fell by 1.4% to a weekly average price of $3.42/mmbtu. The Henry Hub price was $0.28/mmbtu below its price level the same week in 2010.
Despite the cold weather the US natural gas consumption slightly declined by 2.4% (week over week) during last week on a national level. the residential/commercial sectors led the fall with a 5.3% decrease.
Production and Imports
Dry natural gas production moderately declined as well during last week by 0.5% to 63.5 Bcf per day.
According to the report the natural gas rig count sharply declined by 33 by the end of last week to reach 877.
On a national level, the US temperatures were 0.3 degrees cooler than normal, but when comparing temperatures on a regional level: the Western States’ temperatures were much colder than normal while the Midwest and Northeastern Divisions experienced higher than normal temperatures.
Prices for the Week Ending November 11th
To sum up, natural gas storage increased while natural gas prices, production and consumption declined during the week of November 11th.
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