Natural gas prices (Henry Hub) are traded down in recent days all the way down to $4.52/mmbtu on June 15th, after they have reached last week their highest price level in nearly a year.
Last week there was a heat wave in the U.S.; after the heat wave passed, this may have reduced the consumption of natural gas for electricity purposes and may have drive natural gas prices down this week. Furthermore, the recent decline in crude oil prices is also likely to cause natural gas prices to decline as well.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on June 10th:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) continue to rise as it inclined for the tenth straight week; last week it rose by 3.2% or by 69 Bcf; as a result, the natural gas storage inclined to 2.256 billion cubic feet for all lower 48 states; the natural gas storage is still 3.3% below the 5-year average, and 10.9% below the storage level during the same week in 2010.
This rise in storage was primarily due to a 48 Bcf injection in the Eastern Consuming Region natural gas storage.
The chart below shows the natural gas storage (weekly figures) and Henry Hub natural gas prices during 2011; the chart presents the increase of natural gas spot prices and of Natural Gas storage in recent weeks.
The natural gas consumption declined this week by 4.6% over last week. The power sector showed the sharpest drop of 9.6% during this week compared with last week’s; this decline in domestic natural gas consumption comes after it rose a week earlier in the power sector to ward off the heat wave by usage of air conditioning.
Production and Imports
The U.S. natural gas supply remained high, but the production fell by 0.6% as it averaged 64.2 Bcf per day.
The imports of natural gas from Canada inclined by 2.8% to 5.6 Bcf per day, but are still 11% below last year’s average volumes.
According to the report the natural gas rig count declined by 10 during the week to reach 879.
The US temperatures continued to rise and reached a weekly average of 72.4 degrees, which were 4 degrees warmer than the five year average for the week ending on June 9th, and were 1 degree above last year’s average temperatures.
Prices for the week ending June 10th
Natural gas spot price (Henry Hub) declined last week by 2.28% and reached on Friday to $4.72/mmbtu; its average daily change was 0.03%, and its weekly average price was 3.73% abovethe previous week’s average price.
During last week the average natural gas price reached $4.83/mmbtu which is the highest average price level since the week of June 25th 2010.
The Nymex Henry Hub Future Price (July delivery) also declined by 1.39% during the week, but its average price was 1.89% below last week’s average price.
In total, natural gas storage, prices, and imports inclined, while natural gas production and consumption declines during the week of June 10th.
For further reading:
- The Northeast heat wave led the rally of natural gas prices- June 10
- Natural gas market continues its comeback – June 3