Natural gas spot price remained nearly unchanged during last week, after they had rallied a week earlier. The extraction of natural gas from storage continues to rise, but at the current rate it seems the storage levels will continue to be much higher than in recent years. This could mean natural gas prices will resume their decline in the upcoming weeks.
Here is a summary of the recent U.S natural gas market info collected by the EIA for the week ending on February 17th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) decreased for the thirteenth consecutive week; last week by 6.01% or by 166 Bcf; the natural gas storage reached 2,595 billion cubic feet for all lower 48 states; the current natural gas storage is 40.2% above the 5-year average, and is also 40.9% 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 81 Bcf. This means while the storage levels are much higher than last year’s, at least the recent extraction rate was higher than the same week in 2011.
The decrease in storage was primarily due to a 97 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 between 2009 and 2012. During last week the Henry Hub spot price slightly rose by 0.4% to a weekly average price of $2.52/mmbtu. The Henry Hub price was $1.38/mmbtu below its price level the same week in 2011.
The Nymex Henry Hub Future (March delivery) sharply increased during last week by 8.06% and reached on Friday $2.68 /mmbtu; its average daily change was 1.64%, and its weekly average price was 1.69% above the previous week’s average price.
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