Natural gas prices resumed their downward trend during last week and sharply fell. The extraction of natural gas from storage is still lower than the parallel week of 2011. This could mean natural gas prices will continue their fall in the weeks to come.
Here is a summary of the recent U.S natural gas market info collected by the EIA for the week ending on February 3rd:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) fell for the eleventh consecutive week; last week by 2.6% or by 78 Bcf; the natural gas storage reached 2,888 billion cubic feet for all lower 48 states; the current natural gas storage is 32.8% above the 5-year average, and is also 32.8% above the storage level during the same week in 2011. As a comparison, during the same week of February in 2011 the total natural gas extraction was 209 Bcf. This means not only the storage levels are much higher than last year’s, but also the extraction rate is much lower as well.
The decline in storage was primarily due to a 59 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 2011-2012. During last week the Henry Hub spot price sharply fell to a weekly average price of $2.45/mmbtu. The Henry Hub price was $2.06/mmbtu below its price level the same week in 2011.
The average U.S natural gas consumption, on a national level, slightly rose by 4.82% (week over week) during last week. The residential/commercial sectors led the rally with an 8.45% increase. The current consumption level is still 17.35% below the levels during the same week in 2011.
Production and Imports
Imports of natural gas from Canada slightly rose during last week by 0.61%; the imports were still 29.47% below the levels in 2011.
The gross natural gas production slightly fell last week by 0.33%, but is 17.27% above the production level in 2011. As a result the total supply of natural gas fell by 0.29% during last week.
According to the report the natural gas rig count sharply declined by 25; by the end of last week the number of natural gas rigs reached 745.
On a national level, the US temperatures were 9.7 degrees warmer than 30-year normal, and 9.9 degrees warmer than last year. The warm weather is probably among the reasons for the low extractions of natural gas from its storage.
Prices for the Week Ending February 3rd
Natural gas price, the Nymex Henry Hub Future Price (short term delivery) sharply declined during last week by 9.42% and reached on Friday $2.50 /mmbtu; its average daily change was -1.84%, and its weekly average price was 4.02% below the previous week’s average price.
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