The natural gas prices sharply fell in recent days over the speculation of an expected decline in US usage of natural gas for the power sector in the near future as the weather may cool down.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on September 23rd:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the twenty-fifth straight week; last week by 3.5% or by 111 Bcf; the natural gas storage reached 3,312 billion cubic feet for all lower 48 states – the highest stock level since December 17th, 2010; the natural gas storage shifted and was 0.2% above the 5-year average, but 2.7% below the storage level during the same week in 2010.
This increase in storage was primarily due to a 67 Bcf injection in the Eastern Consuming Region natural gas storage.
The chart above shows the natural gas storage (weekly figures) and Henry Hub natural gas prices in 2011; the Henry Hub spot price continued the sharp downward trend of recent week; last week it declined by 4.6% to an average weekly price of $3.77/mmbtu – the lowest price level since November 19th, 2010; the Henry Hub price was $0.24/mmbtu below its price level the same week last year.
US natural gas consumption inclined on a national level by 1.2% over the week; the power sector led the charge with an 11.1% increase mainly driven from a rise in demand in the Northeast and Southeast regions.
Production and Imports
The U.S. production remained nearly unchanged as natural gas production rate inclined last week by 0.1%; there was a sharp increase in natural gas imports from Canada of 5.1%; LNG imports also sharply rose by 17.8% to an average of 463 million cubic feet/d.
According to the report the natural gas rig count remained unchanged during the week at 912.
The US temperatures were cooler than last week, and cooler than normal: they have reached a weekly average of 64.9 degrees for the week of September 22nd; they were 1.4 degree colder than normal, and 4.0 degrees colder than the temperatures from last year (same week).
Prices for the week ending September 23rd
Natural gas spot price (Henry Hub) declined during the week by 1.06%; its average daily change was -0.85%, and its weekly average price was 4.6% below the previous week’s average price.
Nymex Henry Hub Future Price (October delivery) decreased by 3.37% during the week, and its average price was 4.26% below last 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, consumption and production increased while natural gas prices fell during the week of September 23rd.
For further reading: