Natural gas prices (Henry Hub) started to drop in the last couple of weeks after they had risen sharply during the first half of July.
The natural gas storage continues to stock up; this trend is attributed to seasonality.
Here is a summary of the recent U.S natural gas market EIA report regarding the week ending on July 22nd:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) inclined for the sixteenth straight week; last week by 1.6% or by 43 Bcf; as a result, the natural gas storage inclined to 2,714 billion cubic feet for all lower 48 states – the highest stock level since January 14th, 2011; the natural gas storage is still 2.3% below the 5-year average, and 6.9% below the storage level during the same week in 2010.
This rise in storage was primarily due to a 40 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 shows the steady stock up in natural gas storage; it also shows the slow upward trend of natural gas spot price in recent weeks. The Henry Hub is still $0.06/mmbtu below its price level the same week last year.
The heat wave in the US has subsided, but the natural gas demand remained robust; the overall domestic natural gas consumption inclined by 7% compared with previous week’s average consumption. The power sector led the charge as it rose by 12.3% compared to the previous week, but the main spike came over the weekend.
Production and Imports
The U.S. natural gas supply rose by 0.3% during the week; the dry gas production slightly declined by 0.7%, but it remained near the 59 to 61 Bcf per day.
Natural gas imports from Canada continued to rise and increased by 7% to an average of 6.95 Bcf per day during last week.
According to the report the natural gas rig count rose by 4 during the week to reach 889.
The US temperatures were warmer than normal: they have reached a weekly average of 78.9 degrees for the week ending on July 21st, which were 0.4 degrees cooler than last year, but 3.1 degrees warmer than normal.
Prices for the week ending July 22nd
Natural gas spot price (Henry Hub) decreased by 3.04%; its average daily change was -0.12%, but its weekly average price was 3.72% above the previous week’s average price.
The Nymex Henry Hub Future Price (August delivery) also fell by 3.21% during the week, and its average price was 1.9% above last week’s average price.
To sum up, natural gas storage, imports, production and consumption inclined while natural gas prices fell during the week of July 22nd.
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