Natural Gas – Weekly Recap January 7-11

Natural gas (short term delivery) started off the week falling but then changed course and rallied on the last couple of days of the week on account of the higher draw from storage than many had anticipated. According to the recent EIA report, the NG storage sharply fell by 201 Bcf; this fall in the storage might have contributed to the rise in natural gas prices on Thursday and Friday. During last week the Henry Hub future (short term delivery) rose by 1.22%.

Here is a short analysis of the recent changes in natural gas market for the week ending on January 11th 2013:

Natural Gas Market – January Review

The Nymex Henry Hub Future (short term delivery) increased during last week by 1.22% and by Friday reached $3.33/mmbtu; its average daily change was 0.28%, its weekly average price was 2.53% below the previous average price.

The difference between the NG future and spot prices – future minus spot – shifted from Backwardation to contango during the week.

Natural Gas Charts

The following charts show the changes in Nat Gas future (Nymex Henry Hub) in $/mmbtu between January 7-11.

Natural Gas price  chart -  January 7-11 2013

As seen in the chart herein, the NG prices (Henry Hub future and spot) rose by the end 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).  The chart shows the shift in the price of natural gas from downward to upward by the end of the week.

Natural Gas chart - percent change January 7-11  2013

NG Storage Update – EIA Report:

Natural Gas Storage

The underground natural gas storage (Billion Cubic Feet) declined during the previous week by 5.72% or by 201 Bcf; the storage reached 3,316 billion cubic feet for all lower 48 states; the current storage is 10.7% above the 5-year average, but 2.6% below the storage during the same week in 2012. During the same week in January 2012 the NG extraction was only 95 Bcf, and the five year average extraction for the parallel week of January was 143 Bcf. This news is likely to further rally the prices of natural gas. Moreover, based on past years, in the weeks to follow the extractions are likely to augment.

This week’s extraction was mostly driven from Eastern consumption region with an 113 Bcf extraction.

Henry Hub Natural Gas storage and prices 2013 10 JanuaryIn the chart herein are the changes (based on weekly numbers) in storage (and Henry Hub spot price in past years. As seen, the price of natural gas has declined last week while the storage levels sharply dwindled.

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