Natural gas prices kept their rally and spiked during the week; the short term future erased the drop of the past three months in a matter of a three weeks. According to the recent NG storage update, there was only a 30 bcf injection, which is nearly half the injection from a year earlier; this fall maybe due to a drop in imports and a rise in demand; on the other hand the current Nat Gas storage is still 44.5% above the 5-year average. If this trend will continue the storage levels will continue to close their gap from previous year’s levels. This might help keep the prices rising in the near future.
Following the recent change, the gap between future and spot settled mostly in Contango; it reached a weekly average of $0.11/mmbtu.
During last week the Henry Hub spot rose by 2.16% and the future (June delivery) spiked by 10.09%. During May, natural gas spot rose by 11.85% and the future (June delivery) by 7.26%.
Here is a short recap for the developments in natural gas market for the week ending on May 11th 2012:
Natural Gas Market– May Recap
The Nymex Henry Hub Future (June delivery) spiked during last week by 10.09% and rose by Friday to $2.51 /mmbtu – the highest since the end of February 2012; its average daily growth was 1.95%, and its weekly average price was 5.18% above the previous average price.
The Henry Hub spot also rose during last week by 2.16%, and its average price was 3.01% above the previous average price.
The gap 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) settled in Contango during the week; by the end the Contango reached $0.15/mmbtu.
Natural Gas Charts
The following charts presents Nat Gas (Henry Hub) and futures (Nymex Henry Hub) in $/mmbtu between May 7th and May 11th.
NG Storage Update – EIA Report:
According to the recent report, the underground storage (Billion Cubic Feet) rose for the 7th consecutive weeks, last week the storage levels rose by 30 Bcf; the storage settled at 2,606 billion cubic feet for all lower 48 states; the current NGs storage is 44.5% above the 5-year average, and is also 44.2% above the storage level during the same week in 2011.
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