Following the damaged caused by Hurricane Irene mainly in the East Coast, the recent Tropical Depression Lee entered the Gulf of Mexico and caused production shut downs. There may be further weather disputation in this Hurricane season (currently there are heavy rains in the East coast resulting in floods) that could further affect natural gas and crude oil market in the US. Natural gas prices reacted to the news of the production disruption and inclined during the week.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on September 2nd:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the twenty-second straight week; last week by 2.2% or by 64 Bcf; thus, the natural gas storage rose to 3,025 billion cubic feet for all lower 48 states – the highest stock level since December 31st, 2011; the natural gas storage is still 1.9% below the 5-year average, and 4.2% 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 during 2011; the Henry Hub spot price remained unchanged compared with last week’s, and was $0.25/mmbtu above its price level the same week last year.
There was a further drop in natural gas consumption last week mainly driven by the power disruption due to the damages of Hurricane Irene: the U.S. domestic natural gas consumption fell by 6.1% over the week with the power sector leading the drop.
Production and Imports
The U.S. total nominal gas supply fell by 4.2% (w-o-w): this was due to the drop in production of dry natural gas by 3.6%, and the sharp decline in natural gas imports from Canada last week by 10.9%. LNG imports, on the other hand, rose by 4.7% to an average 439 million cubic feet (MMcf) per day.
According to the report the natural gas rig count fell by 3 during the week to reach 895.
The US temperatures were slightly warmer than normal and also slightly warmer than last year: they have reached a weekly average of 74.9 degrees for the week ending on September 1st, which were 3.1 degrees warmer than normal, and 0.9 degrees above the temperatures from last year (same week).
Prices for the week ending September 2nd
Natural gas spot price (Henry Hub) increased during the week by 4.33% to reach on Friday $4.10/mmbtu; its average daily change was 0.73%.
The Nymex Henry Hub Future Price (October delivery) slightly inclined by 0.34% during the week, and its average price was 0.36% above last week’s average price.
To sum up, natural gas storage inclined while natural gas imports, production and consumption fell during the week of September 2nd.
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