Natural gas prices (Henry Hub) continued their downward trend they have had during the last couple of weeks of July. The domestic demand for natural gas is still robust, but experienced a small decline last week; US natural gas production is still strong resulting in loosening the natural gas market in the US and driving the Henry Hub spot price down. The Nymex Henry Hub Future Price (September delivery) fell for the first time below the $4 mark since March 16th.
Here is a short review of the main changes in natural gas prices for the week ending on August 5th:
Natural gas prices 2011 August – Review and Analysis
Natural gas spot price (Henry Hub) decreased during the week by 6.76% and reached on Friday $4.00/mmbtu; its average daily change was -1.23%, and its weekly average price was 4.32% below the previous week’s average price.
The Nymex Henry Hub Future Price (September delivery) also declined by 5.92% during the week, and its average price was 5.59% below 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) remained in backwardation during the week, and by Friday it reached -$0.06/mmbtu.
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 August 1-5.
The chart shows natural gas prices had a downward trend which was steeper by the end of the week.
The second chart shows the daily percent changes of natural gas prices (Henry Hub) and Nymex Henry Hub, (the changes around the weekly trend); it shows that natural gas prices started the week with moderate rises, but by the end of the week the natural gas prices fell very precipitately.
EIA Natural gas report – highlights:
The underground natural gas storage (Billion Cubic Feet) inclined last week by 42 Bcf to 2,758 billion cubic feet for all lower 48 states; the natural gas storage is still 2.4% below the 5-year average.
The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010-2011; the chart shows the steady stock up in natural gas storage, and the sharp change in direction for natural gas spot price.
To sum up, natural gas storage and production inclined while natural gas imports and consumption fell during the week of July 29th.
For further reading:
Previous issues of weekly report:
- Natural gas prices declined last week – 25-29 July
- Natural gas prices declined last week – 18-22 July