The prices of natural gas prices bounced back during the week after they had declined during the previous week. According to the latest EIA report the natural gas storage declined by 73 Bcf; the seasonal shift suggests the extractions from storage are likely to rise in the weeks to follow.
Here is an analysis and short breakdown of the recent developments in U.S natural gas market based on the EIA report for the week ending on November 30th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) declined after it had increased in the past couple of weeks; last week the storage levels fell by 1.88% or by 73 Bcf; the storage reached 3,804 billion cubic feet for all lower 48 states; the current storage is 4.6% above the 5-year average, and 0.9% below the storage during the parallel week in 2011 – this year’s storage was higher than last year’s up to last week. During the same week in November 2011 the NG extraction was 20 Bcf, and the five year average extraction for the parallel week of November was 65 Bcf. Thus, the recent extraction was higher than previous years’ extractions. Based on past years, a rise in extractions tends to occur around the end of November and the beginning of December.
Most of the extraction was from Eastern consumption region with 56 Bcf.
In the chart above are the changes (based on weekly numbers) in storage (and Henry Hub spot price in 2011-2012. As seen, the price of natural gas has risen in recent months while the storage levels remained virtually unchanged.
During the previous week, the Henry Hub spot price rose again by 1.4% to a weekly average price of $3.66/mmbtu. The Henry Hub price is $0.29/mmbtu above its price during the same week last year.
During last week, the average U.S consumption, on a national level, declined by 11.92% (W-over-W). The consumption was also 13.97% below last year’s.
The residential/commercial sector led the fall with a 23.51% drop. The fall in consumption might have been due to the warmer weather; on the other hand, the power sector’s consumption only edged down last week by 0.19%. Finally, Industrial sector’s demand slightly fell last week by 2.09%. The total demand for gas decreased by 11.58% than the previous week and was 13.62% below the same week in 2011.
Production and Imports
Imports from Canada rose during last week by 7.41%; they were 5.24% below the levels in 2011.
The gross production decreased last week by 0.62% and was 0.47% above the production level in 2011. As a result, the total supply of natural gas edged down by 0.04% during last week.
According to the report the natural gas rotary rig count decreased by 4; by the end of last week the number of rigs reached 424.
On a national level, the U.S temperatures were 0.4 degrees cooler than the 30-year normal but were also 5.9 degrees cooler than last year.
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