Natural gas market keeps showing signs of recovery and the future and spot prices continue their upward trend. According to the recent NG storage report, there was a 61 bcf injection, which is 30 Bcf below the injection from a year earlier; this lower than normal injection might suggest the current high storage levels might reach normal levels by November.
Following the recent developments, the difference between future and spot continued to be in Contango; it reached a weekly average of $0.08/mmbtu.
During last week the Henry Hub spot increased by 8.47% and the future (June delivery) spiked by 9.16%. During May, natural gas spot rose by 21.33% and the future (June delivery) by 17.09%.
Here is a short recap for the developments in natural gas market for the week ending on May 18th 2012:
Natural Gas Market– May Review
The Nymex Henry Hub Future (June delivery) continued to rise during last week by 9.16% and by Friday reached $2.74 /mmbtu – the highest level since the late January 2012; its average daily growth was 1.82%, and its weekly average price was 5.74% above the previous average price.
The Henry Hub spot also spiked during last week by 8.47%, and its average price was 7.13% above the previous average price.
The difference between the NG future and spot prices, i.e. future minus spot (if the spot are higher than the future its called Backwardation, if future is higher than its called Contango) remained mostly in Contango during the week; by the end the Contango reached $0.18/mmbtu.
Natural Gas Charts
The following charts shows Nat Gas (Henry Hub) and future (Nymex Henry Hub) in $/mmbtu between May 14th and May 18th.
NG Storage Update – EIA Report:
According to the recent review, the underground storage (Billion Cubic Feet) increased again for the 8th consecutive weeks, last week the storage levels increased by 61 Bcf; the storage settled at 2,667 billion cubic feet for all lower 48 states; the current NGs storage is 40.8% above the 5-year average, and is also 40.9% above the storage level during the same week in 2011.
For further reading:
- What’s Up with Natural Gas? In Short, Nothing Much
- Natural Gas on the Rise, Will This Rally Last?
- Will Natural Gas Hit $1?