Natural gas prices changed direction last week and slightly rose during last week. The extraction of natural gas from storage started to pick up last week, but it is still low compared with the extraction in the parallel week of 2011. This could mean natural gas prices will resume their downward tend 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 10th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) declined for the twelfth consecutive week; last week by 4.4% or by 127 Bcf; the natural gas storage reached 2,761 billion cubic feet for all lower 48 states; the current natural gas storage is 38.3% above the 5-year average, and is also 42% 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 233 Bcf. This means not only the storage levels are much higher than last year’s, but also the extraction rate is still low.
The decrease in storage was primarily due to an 83 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 2009-2012. During last week the Henry Hub spot price rose to a weekly average price of $2.51/mmbtu. The Henry Hub price was $1.66/mmbtu below its price level the same week in 2011.
The average U.S natural gas consumption, on a national level, sharply rose by 14.35% (week over week) during last week. The residential/commercial sectors led the rally with a 21.07% increase. The current consumption level is 3.86% above the levels during the same week in 2011.
Production and Imports
Imports of natural gas from Canada slightly rose during last week by 5.99%; the imports were still 18.93% below the levels in 2011.
The gross natural gas production slightly fell last week by 0.57%, but is 9.69% above the production level in 2011. As a result the total supply of natural gas slightly increased by 0.24% during last week.
According to the report the natural gas rig count sharply decreased by 25; by the end of last week the number of natural gas rigs reached 720.
On a national level, the US temperatures were still 5.6 degrees warmer than 30-year normal, and 9.9 degrees warmer than last year. The warmer than normal weather is probably among the reasons for the low extractions of natural gas from its storage.
Prices for the Week Ending February 10th
The Nymex Henry Hub Future Price (short term delivery) increased during last week by 3.73% and reached on Friday $2.50 /mmbtu; its average daily change was 0.78%, and its weekly average price was 2.36% below the previous week’s average price.
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