Natural gas prices started off the week rising but soon after they have changed direction and tumbled down throughout the remainder of week. Following these developments the difference between future and spot shifted from Contango to Backwardation. The NG storage continues to increase at a slower pace than in the past. Perhaps as we are nearing the end of the upcoming August future the price is declining.
During last week the Henry Hub spot increased by 2.32% while the future (August delivery) declined by 1.95%. During the month, natural gas spot increased by 12.77% and the future (short term delivery) by 7.09%.
Here is a short review for the latest changes in natural gas market for the week ending on July 27th 2012:
Natural Gas Market– July Review
The Nymex Henry Hub Future (short term delivery) declined during last week by 1.95% and by Friday reached to $3.02 /mmbtu; its average daily change was -0.37%, its weekly average price was 5.87% above the previous average price.
The Henry Hub spot rose during last week by 2.32%, and its average price was 6.98% above the previous average price.
The difference between the NG future and spot prices, i.e. future minus spot (if the spot is higher than the future it is named Backwardation, if future is higher than spot it is named Contango) started the week in Contango and moved to Backwardation during the rest of the week; by the end the difference reached $0.07, i.e. Backwardation.
Natural Gas Charts
The following charts shows Nat Gas (Henry Hub) and future (Nymex Henry Hub) in $/mmbtu between July 23rd and July 27th.
The first chart presents the changes of NAT Gas (Henry Hub future and spot) as natural gas future and spot rose during most of the week.
In the second chart are the daily percent changes of the Henry Hub spot and Nymex Henry Hub future (short term delivery).
NG Storage Update – EIA Report:
According to the latest EIA report on natural gas the underground storage (Billion Cubic Feet) increased by only 26 Bcf to 3,189 billion cubic feet for all lower 48 states; the NGs storage was 15.8% above the 5-year average, and was also 18% above the storage level during the same week in 2011.
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