Natural gas prices continued to decline during last week even though the natural gas spot and future (May delivery) prices have changed direction and rallied during most of the week. This may be stem from the upcoming expiration of the May future in the days to come. In the meantime, the natural gas prices are at a 10 year low. The natural gas storage increased again at a slightly faster pace than a year earlier. The supply of natural gas edged up during last week, while the total demand in the U.S slightly decline.
Here is an analysis and report on the U.S natural gas market changes based on the EIA update for the week ending on April 20th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) rose for the fifth consecutive week; last week the storage levels increased by 1.43% or by 36 Bcf; the natural gas storage settled at 2,548 billion cubic feet for all lower 48 states; the current natural gas storage is 55.4% above the 5-year average, and is also 52% above the storage during the same week in 2011. As a comparison, during the same week in April 2011 the total natural gas injection was 31 Bcf. This means that the current injection was very similar to the injection a year earlier.
The increase in storage was primarily because of a 40 Bcf injection from the Eastern consumption region natural gas storage.
In the following chart are the weekly changes in natural gas storage (and Henry Hub spot price during 2011 and 2012. During the previous week the Henry Hub spot price declined by 3.6% to a weekly average price of $1.86/mmbtu – the lowest price level in over a decade. Furthermore, the Henry Hub price was $2.41/mmbtu below its price during the same week in 2011.
The average U.S natural gas consumption, on a national level, slipped by 1.1% (week over week) during last week. The power sector led the decline with a 5.02% decrease. The total demand for gas was 0.61% below the previous week’s levels but was 7.58% above the same week in 2011.
Production and Imports
Imports of natural gas from Canada edged up during last week by 0.35%, but the imports were 8.38% below the levels in 2011.
The gross natural gas production rose last week by 0.2% but is 4.04% above the production level in 2011. As a result the total supply of natural gas increased by 0.27% during last week.
According to the report the natural gas rotary rig count increased by 7; by the end of last week the number of natural gas rigs reached 631.
On a national level, the US temperatures were 4.1 degrees warmer than the 30-year normal and 3.7 warmer than the same period last year.
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