Natural gas market continues to cool down even though the weather in the US. keeps getting colder on a national level; this change might be stem, in part by the slightly warmer weather in the East coast – the region most responsible for the demand for natural gas for heating purposes.
The Contango remains high as it reached on Friday $0.30 (future price (December delivery) minus spot price for Henry Hub). This might indicate that the market expects natural gas prices to start rising. By the end of the week the Henry Hub spot price reached $3.28/ MMbtu. The Nymex Henry Hub Future Price (December delivery) reached $3.58/ MMbtu.
Here is a short review of the main changes in natural gas prices for the week ending on November 11th:
Natural Gas Prices November – Weekly Review and Analysis
Nymex Henry Hub Future Price (December delivery) sharply declined during last week by 3.14% and reached on Friday $3.58/mmbtu; its average daily change was -1.09%, and its weekly average price was 3.70% below the previous week’s average price.
Natural gas spot price (Henry Hub) also sharply declined by 2.09% during the week, and its average price was 1.73% below last week’s average price.
The spread between the Henry Hub future and spot gas prices, i.e. future price minus spot price (if the spot prices are higher than the future prices its called Backwardation, if future price is higher than its called Contango) continued to be in Contango during the week, and by Friday the gap reached $0.30, i.e. Contango.
Natural Gas Prices Chart
The following chart shows the daily changes of natural gas prices (Henry Hub) and futures prices (Nymex Henry Hub) in $/mmbtu during November 7 to 11.
The chart shows the development of natural gas spot price and Henry Hub future price during last week: the Henry Hub future price had a downward trend during most of last week; the Henry Hub spot price picked up at the first half of last week, but sharply fell during the second half.
The second chart presents the daily percent changes of natural gas spot price (Henry Hub) and Nymex Henry Hub future price.
EIA Natural Gas Report – Highlights:
The underground natural gas storage (Billion Cubic Feet) inclined for the thirty-first straight week (for the week of November 4th) by 37 Bcf and reached 3,831 billion cubic feet for all lower 48 states; the current natural gas storage is 5.9% above the 5-year average, but is still 0.2% below the storage level during the same week in 2010.
In the chart below are the natural gas storage (weekly figures) and Henry Hub natural gas prices in 2010 and 2011:
To sum up, natural gas storage and production increased while natural gas consumption declined during the week of November 4th.
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Previous issues of weekly report: