Natural gas prices fell sharply during the week – June 13-17

Natural gas prices (Henry Hub) suffered their sharpest decline in June during last week. This drop is probably related to the change in temperatures in the US as the heat wave passed along with the high demand for electricity. The decline in crude oil prices during last week may have also contributed to the drop in natural gas prices seeing that natural gas is a commodity that is interchangeable (in certain areas) with crude oil.

Here is a short review of the main changes in natural gas prices for the week ending on June 17th:

Natural gas prices 2011 June – Review and Analysis


table natural gas spot price Henry Hub -  13-17  June 2011

Natural gas spot price (Henry Hub) declined during the week by 7.58% and reached on Friday to $4.39/mmbtu – the lowest price level in June; its average daily change was -1.43%, and its weekly average price was 5.5% below the previous week’s average price.

The Nymex Henry Hub Future Price (July delivery) also declined by 6.8% during the week, and its average price was 5.8% 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) fluctuated during the week but was mostly in Backwardation (i.e. the spot price was higher than spot price) and ended the week at -$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 June 13 to 17.


natural gas price Henry Hub chart -  13-17  June 2011

The chart presents that natural gas prices had a downward trend during most of the week.

natural gas SPOT price chart - percent change Henry Hub  13-17  June 2011

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 fell sharply on Tuesday and Friday for spot price, and Monday and Wednesday for future price.

EIA Natural gas report – highlights:

The underground natural gas storage (Billion Cubic Feet) continue to rise as it inclined for the tenth straight week; last week it rose by 3.2% or by 69 Bcf; as a result, the natural gas storage inclined to 2.256 billion cubic feet for all lower 48 states; the natural gas storage is still 3.3% below the 5-year average, and 10.9% below the storage level during the same week in 2010.

The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2011; the chart presents the increase of natural gas spot prices and of Natural Gas storage in recent weeks.


natural gas prices chart 2011 (Henry Hub Natural Gas storage 2011 JUNE 10

In total, natural gas storage and imports inclined, while natural gas production and consumption declines during the week of June 10th.

For the complete natural gas market report, see here.


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