Natural gas prices resumed to fall precipitately during last week. Furthermore, the gap between future and spot didn’t expand but it remained in Contango and reached by the end of the week $0.12/mmbtu. According to the recent NG storage report, there was a slight injection of 8 bcf. Furthermore, the current natural gas storage is 58.7% above the 5-year average. As the storage levels will continue 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, which was nearly 4,410 Bcf in 2010. This means natural gas prices could continue their downward trend in the weeks to come.
During last week the Henry Hub spot price declined by 6.53% and the future price (May delivery) fell by 5.26%. During the month natural gas spot price decreased by 6.06% and the future price (May delivery) fell by 7.04% – this means most of the drop in NG prices during the month so far was during last week.
Here is a short recap for the changes in natural gas prices for the week ending on April 13th 2012:
Natural Gas Price April – Weekly Recap and Analysis
The Nymex Henry Hub Future Price (May delivery) sharply declined during last week by 5.26% and reached on Friday $1.98 /mmbtu; its average daily change was -1.06%, and its weekly average price was 5.53% below the previous week’s average price.
Natural gas price (Henry Hub spot) also sharply fell during last week by 6.53%, and its average price was 2.24% below last week’s average price.
The difference 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) remained in Contango during the week, by the end of the week the gap reached $0.12/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 April 9th and April 13th.
The first chart shows the changes in natural gas prices (Henry Hub future and spot) during last week: the natural gas future price sharply declined during the first half of 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 report, the underground natural gas storage (Billion Cubic Feet) rose for the third consecutive weeks, last week the storage levels increased by 0.32%; the natural gas storage settled at 2,487 billion cubic feet for all lower 48 states; the current natural gas storage is 58.7% above the 5-year average, and is also 55.5% above the storage level during the same week in 2011.
The complete recent natural gas storage weekly report of April 12th.
For further reading: