Natural gas market had a very turbulent week as did most other energy commodities such as crude oil market. The Contango reached a very high level by the end of the week which might mean that November is going to be a month in which natural gas prices will increase. The Henry Hub future price (short term) outperformed again the spot price mainly during the second half of last week. The news that U.S. GDP grew by 2.5% during Q3 2011 may have helped push natural gas prices up. By the end of the week the Henry Hub spot price reached $3.63/ MMbtu. The Nymex Henry Hub Future Price (November delivery) rose to $3.92/ MMbtu – the highest price level since September 14th, 2011.
Here is a short review of the main changes in natural gas prices for the week ending on October 28th:
Natural Gas Prices September – Weekly Review and Analysis
Nymex Henry Hub Future Price (November delivery) sharply inclined during last week by 8.77% and reached on Friday $3.92/mmbtu; its average daily change was -1.59%, and its weekly average price was 2.47% above the previous week’s average price.
Natural gas spot price (Henry Hub) only slightly inclined by 0.55% during the week, and its average price was only 0.06% above 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 mostly 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 24- October 28.
The chart shows the weekly development of natural gas spot price and Henry Hub future price as the future price sharply inclined mainly during the second part of the week, while the Henry Hub spot price remained flat.
The second chart presents the daily percent changes of natural gas spot price (Henry Hub) and Nymex Henry Hub future price; the spot price started the week with sharp gains but then leveled out, while the Henry Hub future price fluctuated throughout the week and by the second part of the week shot up.
EIA Natural Gas Report – Highlights:
The underground natural gas storage (Billion Cubic Feet) inclined for the twenty-ninth straight week; last week by 2.5% or by 92 Bcf to reach 3,716 billion cubic feet; the current natural gas storage is 0.7% 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 consumption increased while natural gas production and imports slipped during the week of October 21st.
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