Natural gas prices (Henry Hub) changed direction from the downward trend they had been demonstrating in the past few weeks, and climb up during last week. The domestic demand of natural gas is still robust, despite its recent fall last week over the ease in natural gas consumption in the electric sector. US natural gas production is still growing resulting in loosening the natural gas market in the US and keeping the Henry Hub spot price at a low rate. The Nymex Henry Hub Future Price (September delivery) ended the week on $4.06/ MMbtu.
Here is a short review of the main changes in natural gas prices for the week ending on August 12th:
Natural gas prices 2011 August – Review and Analysis
Natural gas spot price (Henry Hub) increased during the week by 4% and reached on Friday $4.16/mmbtu; its average daily change was 0.8%, but its weekly average price was 3.28% below the previous week’s average price.
The Nymex Henry Hub Future Price (September delivery) also inclined by 0.60% during the week, but its average price was 1.01% 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 -$0.10/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 8-12.
The chart shows natural gas prices had a general upward trend during most 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 presents the sharp shifts in the percent changes in natural gas prices during the week; it also shows that natural gas future and spot prices didn’t move in sync during the second half of the week..
EIA Natural gas report – highlights:
The underground natural gas storage (Billion Cubic Feet) inclined by 25 Bcf to 2,783 billion cubic feet for all lower 48 states – the highest stock level since January 7th, 2011; the natural gas storage is still 2 6.6% 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 storage shows a steady stock up since the beginning of April; during recent weeks natural gas spot price shows a sharp change in direction.
To sum up, natural gas storage and production inclined while natural gas prices, imports and consumption fell during the week of August 5th.
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