Natural gas prices start June with rises – 31 May to June 3

Natural gas prices (Henry Hub) started the month of June with rises; during last week, despite the seasonal shift in the U.S., the average weekly prices of natural gas (Henry Hub) inclined compared with the previous week’s; on Thursday natural gas prices (future price short term) reached $4.80 per mmbtu – the highest  price level since July 30th 2010.

Let’s review the main changes in natural gas prices for the week ending on June 3rd:

Natural gas prices 2011 May – Review and Analysis


table natural gas spot price Henry Hub -  31 May- 3 June 2011

Natural gas spot price (Henry Hub) inclined during the week by 1.94% and reached to an average price of 4.65$/mmbtu; its average daily change was 2.03%, and its weekly average was 6.99% above the previous week’s average price.

The Nymex Henry Hub Future Price (July delivery) also inclined by 0.94% during the week, and its average price was 7.27% below last week’s average price.

These figures imply that natural gas prices inclined very sharply compared with last week’s prices, but not so compared with the beginning of the week.


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) started off the week in Contango (i.e. future price higher than spot price), and by the end of the week it fell to -0.01$/mmbtu, which is Backwardation (i.e. the spot price was higher than spot price). Such a shift is something to be expected at the end and beginning of a month.

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 31 May to 3 June.


natural gas price Henry Hub chart -  31 May- 3 June 2011

The chart doesn’t show a clear trend, just a rapid rise at the middle of the week for both the spot and future prices.

natural gas SPOT price chart - percent change Henry Hub  31 May- 3 June 2011

The second chart presents the daily percent changes of natural gas prices (Henry Hub) and Nymex Henry Hub, (the changes around the weekly trend); it shows the rapid changes in natural gas prices, as they inclined sharply at the beginning and the middle of the week, while they finished the week with falls.


Natural gas storage, consumption and production – highlights:

Here are the main highlights of the recent EIA weekly report on natural gas and regarding the week ending on May 27th: The underground natural gas storage (Billion Cubic Feet) rose by 4.1%, i.e. a 83 Bcf; as a result,  the natural gas storage rose to 2.107 billion cubic feet for all lower 48 states; the natural gas storage is still 2% below the 5-year average, and 10.1% below the storage level during the same week in 2010 (see chart below).

The chart below presents the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2010 and 2011; the chart shows that natural gas spot prices inclined during the same time last year, despite the rise in NG storage.


natural gas prices chart 2011 (Henry Hub Natural Gas storage 2011 MAY 27

In total, all the natural gas indexes inclined including storage, prices, production imports and consumption rose during the week of May 27th.




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