Natural gas prices didn’t tumble down during last week after their sharp falls they have had during most of March. The gap between future and spot didn’t expand but it is still in Contango and reached by the end of the week $0.21/mmbtu. According to the recent NG storage report, there was a slight injection for the first time this year. Furthermore, the current natural gas storage is 54% above the 5-year average. This means as the storage levels will start to stock up, the gap between the normal storage levels and the current level will further expand; there is also the possibility of natural gas storage reaching its max capacity – in such a case we may see an even sharper drop in natural gas prices then what we have seen up to now. I will even suggest that if not for the high crude oil prices, natural gas prices would have been by now well below the $2 mark.
During last week the Henry Hub spot price rose by 1.97% while the future price (April delivery) by fell by 2.15%. During March natural gas spot price decreased by 15.16% and the future price (April delivery) fell by 12.64%.
Here is a short recap for the changes in natural gas prices for the week ending on March 23rd2012:
Natural Gas Price March – Weekly Recap and Analysis
The Nymex Henry Hub Future Price (April delivery) declined during last week by 2.15% and reached on Friday $2.28 /mmbtu; its average daily change was -0.42%, while its weekly average price was 1.18% above the previous week’s average price.
Natural gas price (Henry Hub spot) on the other hand slightly rose during last week by 1.97%, and its average price was 2.38% above last week’s average price.
The gap between the natural gas future and spot prices, i.e. future price minus spot price (if the spot are higher than the future its called Backwardation, if future is higher than its called Contango) continued to be in Contango during the week, by the end of the week the gap shrunk to $0.21/mmbtu, i.e. Contango.
Natural Gas Price Charts
The following charts shows the changes in natural gas (Henry Hub) and futures prices (Nymex Henry Hub) in $/mmbtu between March 19th and March 23rd.
The first chart presents the developments in natural gas prices (Henry Hub future and spot) during last week: the natural gas future price slightly declined during the week.
In the second chart are the daily percent changes of natural gas prices (Henry Hub spot and Nymex Henry Hub future).
Natural Gas Storage Update – EIA Report:
According to the recent natural gas report, the underground natural gas storage changed direction and rose last week by 11 Bcf to 2,380 billion cubic feet for all lower 48 states; the current natural gas storage is 54% above the 5-year average, and is also 47.5% above the storage level during the same week in 2011.
The complete recent natural gas storage weekly report of March 23rd.
For further reading: