Natural Gas Storage Declined Again by 38 Bcf– November 26th

The prices of natural gas prices increased during last week. The full EIA report wasn’t published but the storage and prices weekly updates came out. The storage levels declined again for the second time this season mainly due to an extraction from the Eastern storage.

Here is an analysis and short breakdown of the recent changes in U.S natural gas market based on the EIA report for the week ending on November 16th:

Natural Gas Storage

The underground natural gas storage (Billion Cubic Feet) fell for the second time this season; last week the storage levels declined by 0.97% or by 38 Bcf; the storage reached 3,873 billion cubic feet for all lower 48 states; the current storage is 4.5% above the 5-year average, and only 0.6% above the storage during the parallel week in 2011 – the gap between last year’s level, the 5-year average and current level continues to shrink. During the same week in November 2011 the NG injection was 9 Bcf, and the five year average injection for the parallel week of November was 5 Bcf. Thus, the recent extraction was still premature compared to past years’ injections and last year’s injection during the parallel week. If there will only be extractions in the weeks to come, the gap between the current storage levels and past year’s storage levels are likely to further shrink.

The fall in storage was mainly but not solely due to a 19 Bcf extraction from the Eastern consumption region.

In the chart below are the changes (based on weekly numbers) in storage (and Henry Hub spot price between the years 2011 and 2012. As seen, the price of natural gas has increased in the past few weeks.

During last week, the Henry Hub spot price rose again by 4.1% to a weekly average price of $3.54/mmbtu. The Henry Hub price is $0.44/mmbtu above its price during the same week in 2011.

Henry Hub Natural Gas storage and prices 2012 November 22


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