Natural gas prices (Henry Hub) finished the week with a downward trend; the heat wave in the US has subsided during the week and so did the pressure for natural gas prices to rise. The domestic demand for natural gas is still strong in the US but the market has adjusted to the increase in consumption by raising the production and the imports of natural gas from Canada.
Here is a short review of the main changes in natural gas prices for the week ending on July 29th:
Natural gas prices 2011 July – Review and Analysis
Natural gas spot price (Henry Hub) decreased during the week by 4.27% and reached on Friday to $4.26/mmbtu; its average daily change was -0.90%, and its weekly average price was 3.8% below the previous week’s average price.
The Nymex Henry Hub Future Price (August delivery) also declined by 5.61% during the week, and its average price was 4.1% 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 -$0.12/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 July 25-29.
The chart shows natural gas prices had a downward trend which was steeper during the second 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 that natural gas prices didn’t change much during the first half of the week, but by the end of the week they have fell very precipitately.
EIA Natural gas report – highlights:
The underground natural gas storage (Billion Cubic Feet) inclined by 43 Bcf to 2,714 billion cubic feet for all lower 48 states – the highest stock level since January 14th, 2011; the natural gas storage is still 2.3% below the 5-year average.
The chart below shows the steady stock up in natural gas storage (weekly figures) and the slow upward trend of Henry Hub natural gas prices in recent weeks.
To sum up, natural gas storage, imports, production and consumption inclined during the week of July 22nd.
For further reading:
Previous issues of weekly report: