Natural gas prices kept on freefalling most of the week – 4-8 April

The natural gas prices continue to decline as we are exiting the winter, even if there are still some rain showers and thunderstorms in parts of the US.

The Henry Hub future price (May delivery) shed from its value during April so far 7.4%, while spot price decreased by 6.0%; the week ended with the Henry Hub backwardation reaching 0.02$/mmbtu.

Let’s review the main changes in natural gas prices for the week ending on April 8th:

Natural gas spot and future prices – Review and Analysis

table natural gas spot price - 4-8 April 2011

The Nymex Henry Hub Future Price (May delivery) fell by 5.81% during the week, and its average price was 4.37% below last week’s average price.

Natural gas spot price (Henry Hub) also decreased from beginning to end of the week by 3.56% and reached 4.06$/mmbtu on Friday; Its average daily change was  -1.23%, and its weekly average was 3.3% below the previous week’s average price.

The Backwardation (the spread between the future and spot prices, i.e. future minus spot, in which the spot prices are higher than the future prices) for Henry Hub fluctuated throughout the week, but at the end of the week it settled at -0.02$/mmbtu with a weekly average of -0.01.

See here for an explanation for the recent downward trend in natural gas prices during last week.

Natural gas price charts

The following chart shows the daily changes of natural gas spot price (Henry Hub) and futures price (Nymex Henry Hub) in $/mmbtu during last week.


natural gas price chart - 4-8 April 2011

The chart shows the clear downward trend of these prices during last week.

The second graph shows the natural gas spot price (Henry Hub) and futures price (Nymex Henry Hub) daily percent change (the changes around the weekly trend). It shows how the spot price fluctuated over the week, but for most of the days there were negative percent changes.

natural gas SPOT price chart - percent change 4-8 April 2011

Natural gas storage, consumption and production – highlights:

Here are the main highlights of the recent EIA weekly report on natural gas and regarding the week ending on April 1st 25th: The underground natural gas storage (Billion Cubic Feet) decreased by 2.8%, i.e. a withdraw of 45 Bcf, as the total storage reached 1,579 billion cubic feet for all lower 48 states; the natural gas storage is 10 Bcf above the 5-year average.

U.S. natural gas consumption fell during last week by 16% compared to the previous week’s average consumption; the drop is mainly in the residential and commercial sectors’ consumption, which was 79% above the same week in 2010.

The chart below presents the total natural gas storage (weekly figures) and Henry Hub spot price fluctuations during 2010-2011 up to date:


Natural gas spot price (Henry Hub Natural Gas storage April 1

The chart shows the relation between the two set of series.

In total, natural gas production remains unchanged or with moderate fluctuations, and imports, storage and consumption declined during the week ending on April 1st.


For further reading (on this site):

Natural gas storage declined | EIA review, April 8

Natural gas prices outlook– 7 April

Previous issues of weekly report: