Natural gas market continues to fluctuate and despite the moderate drop in natural gas prices (Henry Hub) during last week, its domestic demand rose due to the heat wave. Nevertheless, the natural gas storage keeps on stocking 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 8th:
Natural gas Storage
The underground natural gas storage (Billion Cubic Feet) inclined for the fourteenth straight week; last week it rose by 3.3% or by 84 Bcf; as a result, the natural gas storage inclined to 2.611 billion cubic feet for all lower 48 states – the highest stock since January 14th, 2011; the natural gas storage is still 2% below the 5-year average, and 7.7% below the storage level during the same week in 2010.
This rise in storage was primarily due to a 59 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; natural gas spot price is still lower by $0.35/mmbtu compared with its price level the same week last year; it also shows that the current rise in the natural gas storage is part of the seasonal stock up.
Due to the recent heat wave in the US, the domestic natural gas consumption inclined by 4.7% compared with previous week’s average consumption. The power sector led the charge with a 8.5% over last week.
Production and Imports
The U.S. natural gas production reached an average of 64.0 Bcf per day which is a 0.4% decrease compared with last week’s average production.
Natural gas imports from Canada averaged 6.5 Bcf per day during last week, but remained 11.1% below last year’s volume; the LNG imports keep on falling as they fell to 0.4 Bcf per day during last week, as they remained 62.8% below last year’s import rate.
According to the report the natural gas rig count fell by 1 during the week to reach 873.
The US temperatures were warmer than last week and reached a weekly average of 77.1 degrees for the week ending on July 7th, which were 2.3 degrees warmer than last year, and 2.9 degrees cooler than normal.
Prices for the week ending July 8th
Natural gas spot price (Henry Hub) fell during the week by 3.51% and reached on Friday to $4.21/mmbtu; its average daily change was 0.57%, and its weekly average price was 2.08% below the previous week’s average price.
The Nymex Henry Hub Future Price (August delivery) also declined by 4.77% during the week, and its average price was 0.64% below last week’s average price.
To sum up, natural gas storage and consumption rose, while natural gas prices, production and imports fell during the week of July 8th.
For further reading:
- Natural gas storage rose by 95 Bcf last week – July 8
- Natural gas stocks keep on rising – June 30
- Natural gas market is cooling down – June 24