Natural gas market continues its comeback – June 3

Natural gas market continues to heat up as natural gas prices keep on rising, mainly due to the rise in consumption in the power sector.

Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on May 27th:

Natural gas Storage

The underground natural gas storage (Billion Cubic Feet) increased for the eighth straight week, last week by 4.1%, i.e. a 83 Bcf; as a result,  the natural gas storage rose to 2.107 billion cubic feet for all lower 48 states; the natural gas storage is still 2% below the 5-year average, and 10.1% below the storage level during the same week in 2010 (see chart below).

This rise in storage was primarily due to a 51 Bcf injection in the Eastern Consuming Region natural gas storage.

The chart below presents the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010 and 2011; the chart shows that natural gas spot prices inclined during the same time last year, despite the rise in NG storage.

 

natural gas prices chart 2011 (Henry Hub Natural Gas storage 2011 MAY 27

Consumption

U.S. natural gas consumption inclined by 4.1% during the week to nearly an average of 56 Bcf; this rise is mainly due to 10.6% rise in the power sector consumption, which was caused due to the heat wave.

Production and Imports

The U.S. natural gas production rose last week by 0.9% and averaged above 64.7 Bcf/d, and was 6.5% higher than the same week last year.

The imports of natural gas from Canada changed direction and also inclined last week by 1.2% to 5.3 Bcf, which was 16.1% below the same time last year.

The US temperatures continued to rise and reached a weekly average of 66.6 degrees, which were 2.0 degrees warmer than the five year average for the week ending on May 26th, but were slightly cooler than last year by 0.9 degrees,.

Prices for the week ending May 27th

Natural gas spot price (Henry Hub) inclined during the week by 2.11% and reached by Friday 4.36$/mmbtu; its average daily change was 1.51%, and its weekly average was 4.67% above the previous week’s average price.

The Nymex Henry Hub Future Price (June delivery) also inclined by 4.00% during the week, and its average price was 4.37% below last week’s average price.

A detailed analysis about natural gas spot price for the week of May 27th is herein.

In total, all the natural gas indexes inclined including storage, prices, production imports and consumption rose during the week of May 27th.

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