Natural gas prices resumed their upward trend hiked during most of last week. Following these developments the difference between future and spot shifted from Backwardation back to Contango. The recent rise in oil prices during last week may have contributed to the rally of natural gas future rates. The NG storage continues to rise at a much slower rate than last year.
During last week the Henry Hub spot rose by 4.86% and the future (August delivery) by 7.32%. During the month, natural gas spot increased by 10.22% and the future (short term delivery) by 9.22%.
Here is a short overview for the recent changes in natural gas market for the week ending on July 20th 2012:
Natural Gas Market– July Review
The Nymex Henry Hub Future (short term delivery) rose during last week by 7.32% and by Friday reached to $3.08 /mmbtu – the highest price level since the beginning of the year; its average daily change was 1.47%, its weekly average price was 3.02% above the previous average price.
The Henry Hub spot increased during last week by 4.86%, and its average price was 3.76% above the previous average price.
The gap between the NG future and spot prices, i.e. future minus spot (if the spot is higher than the future it is named Backwardation, if future is higher than spot it is named Contango) started the week in Backwardation and moved to Contango during the rest of the week; by the end the difference reached $0.06, i.e. Contango.
Natural Gas Charts
The following charts shows Nat Gas (Henry Hub) and future (Nymex Henry Hub) in $/mmbtu between July 16th and July 20th.
In the second chart are the daily percent changes of the Henry Hub spot and Nymex Henry Hub future (short term delivery).
NG Storage Update – EIA Report:
According to the recent EIA report on natural gas the underground storage (Billion Cubic Feet) rose by only 28 Bcf to 3,163 billion cubic feet for all lower 48 states; the NGs storage was 17.5% above the 5-year average, and was also 19.2% above the storage level during the same week in 2011.
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