Natural gas prices changed direction and rose last week – 11-15 July

Natural gas prices (Henry Hub) continues to zigzag: during the first week of July natural gas prices fell very sharply; during last week, however they have shifted direction and bounced back to finished the week at $4.49/mmbtu for Henry Hub spot price. Despite the shifts in directions, US natural gas storage continued to stock up. This recent rise might be stem from supply and demand friction as the US consumption rose, but the import and production declined during last week.

 Here is a short review of the main changes in natural gas prices for the week ending on July 15th:

Natural gas prices 2011 July – Review and Analysis


table natural gas spot price Henry Hub -  11-15  July 2011

Natural gas spot price (Henry Hub) increased during the week by 3.22% and reached on Friday to $4.49/mmbtu; its average daily change was 1.4%, and its weekly average price was 2.77% above the previous week’s average price.

The Nymex Henry Hub Future Price (August delivery) also inclined by 3.11% during the week, and its average price was 3.85% above 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) shifted from in backwardation to contango during the week, and by Friday it shifted to Contango 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 July 11-15.


natural gas price Henry Hub chart -  11-15 July  2011

The chart shows natural gas prices had an upward trend during last week; the Henry Hub future price rose very sharply mainly by the end of the week.


natural gas SPOT price chart - percent change Henry Hub  11-15  July  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 future price rose very sharply at the end of the week by over 3.5%;  natural gas spot price inclined very sharply at the beginning of the week by over 3.5%.

 EIA Natural gas report – highlights:


The underground natural gas storage (Billion Cubic Feet) inclined by 84 Bcf to 2.611 billion cubic feet for all lower 48 states; the natural gas storage is still 2% below the 5-year average, and it’s 7.7% 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.

natural gas prices chart 2011 (Henry Hub Natural Gas storage 2011 July 14

To sum up, natural gas storage and consumption rose, while natural gas prices, production and imports fell during the week of July 8th.
For the complete natural gas market report, see here.



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