The natural gas prices continued to decline during the second week of October, despite the slight increase in U.S natural gas consumption that might explain the recent gains in the natural gas (Henry Hub) prices during this week.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on October 14th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the twenty-eighth straight week; last week by 2.9% or by 103 Bcf; the natural gas storage reached 3,624 billion cubic feet for all lower 48 states – the highest stock level since December 3rd, 2010; the current natural gas storage is 3.2% above the 5-year average, but is still 1.3% below the storage level during the same week in 2010.
This increase in storage was primarily due to a 58 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 in 2010 and 2011; the Henry Hub spot price continued its downward trend in past several weeks; during the second week of October the Henry Hub spot price slightly declined by 1.4% to an average weekly price of $3.48/mmbtu – the lowest price level since November 5th, 2010. The Henry Hub price was $0.01/mmbtu below its price level the same week in 2010.
US natural gas consumption inclined during last week on a national level by 5.5%; that being said, the natural gas demand for the power sector declined by 2.9%.
Production and Imports
The U.S. domestic supply slightly increased during last week; the domestic natural gas production slightly rose by 0.1% and the domestic dry gas production was 7.6% above the same time last year; there was an increase in natural gas imports from Canada of 4.1% to an average of 5.6 Bcf/day; LNG imports sharply rose by 22.2% to an average of 0.64 Billion cubic feet/day.
According to the report the natural gas rig count moderately increased by 1 during the week to reach 936.
The US temperatures were warmer from last week, and warmer than normal: they have reached a weekly average of 63.1 degrees for the week of October 13th; they were 4.1 degree warmer than normal, and 0.7 degrees warmer than the temperatures from last year (same week).
Prices for the Week Ending October 14th
The Henry Hub Future Price (November delivery) sharply increased during the week by 4.49%; its average daily change was 1.26%, but its weekly average price was 0.10% below the previous week’s average price.
Natural gas spot price also slightly rose by 2.35% during the week, but its average price was 1.53% below last week’s average price.
To sum up, natural gas storage, production consumption and imports increased while natural gas prices slipped during the week of October 14th.
For further reading:
- Crude Oil Prices – Daily Outlook October 19
- U.S. Oil Stockpiles Sharply Fell by 10.9 Million Bbl – October 20
- Natural gas prices outlook for October 2011