Hurricane Irene has passed and caused a sharp fall in demand for electricity and consequently fall in natural gas consumption; there were some reports of damage to natural gas infrastructure but it didn’t affect the natural gas production. EIA estimates that the recent natural gas price rally in recent days is stem, in part, by the speculations around two weather disturbances: Hurricane Katia that may hit US east coast next week and a tropical system in the central Gulf of Mexico could become a tropical depression and thus disrupt the natural gas production in that region.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on August 26th:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the twenty-first straight week; last week by 1.9% or by 55 Bcf; thus, the natural gas storage rose to 2,961 billion cubic feet for all lower 48 states – the highest stock level since December 31st, 2011; the natural gas storage is still 2% below the 5-year average, and 4.4% below the storage level during the same week in 2010.
This increase in storage was primarily due to a 54 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 2011; the chart shows the recent downward trend of natural gas spot price: The Henry Hub spot price remained unchanged compared with last week’s, and is currently $0.05/mmbtu above its price level the same week last year.
There was a slight decrease in natural gas consumption last week mainly driven by the colder temperatures in the East Coast due to Hurricane Irene: the U.S. domestic natural gas consumption fell by 0.8% over the week with the power sector leading the drop with a 3% decrease week over week.
Production and Imports
The U.S. total nominal gas supply slightly, while natural gas imports from Canada slightly declined last week.
According to the report the natural gas rig count fell by 2 during the week to reach 898.
The US temperatures were slightly warmer than normal but were slightly cooler than last year: they have reached a weekly average of 75.7 degrees for the week ending on August 25th, which were 2.4 degrees warmer than normal, but 0.1 degrees below the temperatures from last year (same week).
Prices for the week ending August 26th
Natural gas spot price (Henry Hub) slightly fell during the week by 0.25%; its average daily change was -0.14%, and its weekly average price was 0.05% above the previous week’s average price.
The Nymex Henry Hub Future Price (September delivery) on the other hand slightly rose by 1.05% during the week, but its average price was 0.3% below last week’s average price.
To sum up, natural gas storage and production inclined while natural gas imports and consumption fell during the week of August 26th.
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