Natural gas storage rose by 25Bcf last week – August 12

Natural gas prices (Henry Hub) started August with falls, while the natural gas storage continues to pile up.

 Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on August 5^th:

 Natural gas Storage

The underground natural gas storage (Billion Cubic Feet) inclined for the eighteenth straight week; last week by 0.9% or by 25 Bcf; as a result, the natural gas storage inclined to 2,783 billion cubic feet for all lower 48 states – the highest stock level since January 7^th, 2011; the natural gas storage is still 2.8% below the 5-year average, and 6.6% below the storage level during the same week in 2010.

 This rise in storage was primarily due to a 38 Bcf injection in the Eastern Consuming Region natural gas storage.

The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2011; the chart shows the steady stock up in natural gas storage since the beginning of April; it also shows the sharp change in direction for natural gas spot price during recent weeks. The Henry Hub is still $0.59/mmbtu below its price level the same week last year.

Consumption

 The decline in temperatures as the heat wave passed caused the overall drop in domestic natural gas consumption for power sector; the power sector natural gas burn fell by nearly 4% week over week.

 

The U.S. weekly dry gas production reached 61.3 Bcf per day, as it increased by 0.6% during the week.

 Natural gas imports from Canada declined again last week compared with the previous weeks average by 8.12% to an average of 7.2 Bcf per day during last week.

According to the report the natural gas rig count inclined by 6 during the week to reach 883

 The US temperatures were still warmer than normal despite the fall in temperatures: they have reached a weekly average of 79.3 degrees for the week ending on August 4^th, which were 4.0 degrees warmer than normal.

 Prices for the week ending August 5^th

Natural gas spot price (Henry Hub) decreased during the week by 6.76% and reached on Friday $4.00/mmbtu; its average daily change was -1.23%, and its weekly average price was 4.32% below the previous week’s average price.

The Nymex Henry Hub Future Price (September delivery) also declined by 5.92% during the week, and its average price was 5.59% below last week’s average price.

 A detailed analysis of natural gas prices for the week of August 5th is herein.

• Natural gas market cools down in the US – August 5