Natural gas market changed direction as natural gas prices fell during the first week of November, despite the increase in natural gas consumption in the U.S. as the winter has started early this year. The Contango reached new highs and on Thursday reached $0.37 (future price minus spot price for Henry Hub). This might indicate the expectations of the market that natural gas prices will start to pick up next month. The positive news from the U.S. of the increase in employment may have helped keep natural gas prices high. By the end of the week the Henry Hub spot price reached $3.49/ MMbtu. The Nymex Henry Hub Future Price (December delivery) reached $3.78/ MMbtu.
Here is a short review of the main changes in natural gas prices for the week ending on November 4th:
Natural Gas Prices November – Weekly Review and Analysis
Nymex Henry Hub Future Price (December delivery) declined during last week by 3.82% and reached on Friday $3.78/mmbtu; its average daily change was -0.71%, but its weekly average price was 2.58% above the previous week’s average price.
Natural gas spot price (Henry Hub) also sharply fell by 4.64% during the week, and its average price was 3.48% 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) was in Contango during the week, and by Friday the gap was $0.29, 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 October 31- November 4.
The chart shows the development of natural gas spot price and Henry Hub future price during last week: the Henry Hub price declined during most of last week.
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) rose last week by 78 Bcf to 3,794 billion cubic feet for all lower 48 states; the current natural gas storage is 5.6% above the 5-year average.
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, consumption production and imports increased during the week of October 28th.
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