The prices of natural gas prices rose again during last week but in recent days they have tumbled down. According to the recent EIA report the natural gas storage rose by 4 Bcf; this change (in the past couple of weeks there were extractions from storage) in pace is common for this season and could continue to next week.
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 23rd:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) rose after it had increased in the past couple of weeks; last week the storage levels rose by 0.1% or by 4 Bcf; the storage reached 3,877 billion cubic feet for all lower 48 states; the current storage is 5.2% above the 5-year average, and only 0.7% above the storage during the parallel week in 2011 – the gap between last year’s level, the 5-year average and current level remained virtual unchanged from last week. During the same week in November 2011 the NG extraction was 1 Bcf, and the five year average extraction for the parallel week of November was 20 Bcf. Thus, the recent injection is very common this time of the year. Based on past years data, the sharp rise in extractions tend to occur around the end of November and the beginning of December.
The moderate change in storage was mainly because 12 Bcf were extracted from the Eastern consumption region, while 12 Bcf were injected were to production region.
In the chart above are the developments (based on weekly numbers) in storage (and Henry Hub spot price between 2011 and 2012. As seen, the price of natural gas has risen in recent weeks.
During last week, the Henry Hub spot price increased again by 2% to a weekly average price of $3.61/mmbtu. The Henry Hub price is $0.69/mmbtu above its price during the same week in 2011.
Consumption
During last week, the average U.S consumption, on a national level, rose by 8.71% (W-over-W). The consumption was also 14.83% higher than last year.
The residential/commercial sector led the rise with a 22.2% gain. The rise in consumption might have been due to the cold weather; on the other hand, the power sector’s consumption fell last week by 4.91%. Finally, Industrial sector’s demand slightly rose last week by 1.89%. The total demand for gas increased by 8.61% than the previous week and was 14.63% above the same week in 2011.
Production and Imports
Imports from Canada declined during last week by 1.25%; they were 3.71% above the levels in 2011.
The gross production increased last week by 0.47% and was 0.56% above the production level in 2011. As a result, the total supply of natural gas edged up by 0.25% during last week.
According to the report the natural gas rotary rig count increased by 11; by the end of last week the number of rigs reached 428.
On a national level, the U.S temperatures were 0.4 degrees cooler than the 30-year normal but were also 3.6 degrees cooler than last year.
For further reading: