Natural gas prices (Henry Hub) changed direction again: after the rises during the previous week, this passing week US natural gas prices declined during most of it. The slightly cooler temperatures in the US eased the demand for natural gas in the electric sector. The sharp falls in the stock market and the concerns in the US over an economic slowdown might have also contributed to the fall in the Henry Hub prices (at least the short term future price). By the end of the week, the Nymex Henry Hub Future Price (September delivery) ended the week on $3.94/ MMbtu.
Here is a short review of the main changes in natural gas prices for the week ending on August 19th:
Natural gas prices 2011 August – Review and Analysis
Natural gas spot price (Henry Hub) decreased during the week by 2.09% and reached on Friday $3.99/mmbtu; its average daily change was -0.59%, and its weekly average price was 1.91% below the previous week’s average price.
The Nymex Henry Hub Future Price (September delivery) also declined by 1.48% during the week, but its average price was 1.77% 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 most of the week, and by Friday it reached -$0.05/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 15-19.
The chart shows natural gas prices had a general downward trend during most of the week mainly during the first half 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 the rise of the daily percent changes in natural gas future and spot prices from negative daily percent changes to positive.
EIA Natural gas report – highlights:
The underground natural gas storage (Billion Cubic Feet) rose by 1.8% to 2,833 billion cubic feet for all lower 48 states; the natural gas storage is still 2.5% below the 5-year average.
The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010 and 2011; the chart shows the seasonal effect of natural gas storage stocking up since April; it also shows the much lower natural gas spot price than a year before: The Henry Hub spot price is currently $0.34/mmbtu below its price level the same week last year.
To sum up, natural gas storage and production inclined while natural gas imports and consumption fell during the week of August 12th.
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Previous issues of weekly report: