The natural gas prices started to decline in recent days over the decline in US demand for natural gas for cooling purposes.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on September 16th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) increased for the twenty-fourth straight week; last week by 2.9% or by 89 Bcf – a similar increase to the one a week earlier; the natural gas storage reached 3,201 billion cubic feet for all lower 48 states – the highest stock level since December 24th, 2011; the natural gas storage is still 1.1% below the 5-year average, and 3.9% 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 above presents the natural gas storage (weekly figures) and Henry Hub natural gas prices in 2011; the Henry Hub spot price slipped last week by 0.3% to an average weekly price of $3.95/mmbtu, and was $0.06/mmbtu below its price level the same week last year.
US natural gas consumption slightly declined by 0.7% over the week with the power sector leading the drop last week as the extreme hot temperatures have dropped.
Production and Imports
The U.S. production remained robust as dry natural gas inclined last week by 1.1%; there was also a slight increase in natural gas imports from Canada of 0.3%. The imports from Canada are still lower than the rate during the same time last year as the NG production reduced the demand for import.
According to the report the natural gas rig count sharply rose by 20 during the week to reach 912.
The US temperatures were cooler than last week, but slightly warmer than normal: they have reached a weekly average of 68.6 degrees for the week of September 15th; they were 1 degree warmer than normal, and 1.1 degrees warmer than the temperatures from last year (same week).
Prices for the week ending September 16th
Nymex Henry Hub Future Price (October delivery) shed 1.93% of its value during the week, and its average price was 0.67% below last week’s average price.
Natural gas spot price (Henry Hub) fell during the week by 2.04%; its average daily change was -0.59%, and its weekly average price was 0.15% below the previous week’s average price.
The gap between the Henry Hub future and spot gas prices was mostly in Backwardation throughout the week.
To sum up, natural gas storage, imports and production increased while natural gas consumption fell during the week of September 16th.
For further reading: