Natural gas prices continue their freefall of recent weeks; the natural gas storage levels are still high for the season but the extraction of natural gas from storage is starting to pick up.
Here is a summary of the recent U.S natural gas market info collected by the EIA for the week ending on January 20th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) sharply fell for the ninth straight week; last week by 5.84% or by 192 Bcf – this was the largest extraction this season so far; the natural gas storage reached 3,098 billion cubic feet for all lower 48 states; the current natural gas storage is 21.4% above the 5-year average, and is 20.7% above the storage level during the same week in 2011. As a comparison, during the third week of January the total natural gas extraction of was 174 Bcf.
The sharp decline in storage was primarily due to a 122 Bcf extraction from the Eastern region natural gas storage.
In the following chart are the changes of natural gas storage (weekly figures) and Henry Hub natural gas prices during 2009-2012. During last week the Henry Hub spot price sharply fell to a weekly average price of $2.40/mmbtu – the lowest level since September 2009. The Henry Hub price was $2.17/mmbtu below its price level the same week in 2011.
The average U.S natural gas consumption, on a national level, sharply fell by 4.41% (week over week) during last week. The power sectors led the fall with a 6.43% decline. The 2012 consumption in the residential/commercial sector is 20.05% below the levels of the third week of 2011.
Production and Imports
Imports of natural gas from Canada fell during last week by 4.43%; the imports were 31.18% below the levels in 2011.
The gross natural gas production slightly declined last week by 0.25%, but is 7.37% above the production level in 2011. As a result the total supply of natural gas fell by 0.64% during last week.
According to the report the natural gas rig count declined by 11; by the end of last week the number of natural gas rigs reached 780.
On a national level, the US temperatures were 1.1 degrees warmer than 30-year normal, and 1.0 degrees warmer than last year. The warm weather is probably among the reasons for the low natural gas prices.
Prices for the Week Ending January 20th
Natural gas price, the Nymex Henry Hub Future Price (short term delivery) sharply declined during last week by 12.36% and reached on Friday $2.34 /mmbtu; its average daily change was -3.19%, and its weekly average price was 14.66% below the previous week’s average price.
To sum up, natural gas consumption, production, imports, prices and storage fell during the week of January 20th.
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