Natural gas price continued their downward trend and sharply fell during this and last week. The natural gas (short term) future price fell below the $2 mark for the first time in over a decade ( the last time it was back in January 22nd, 2002 when natural gas declined to $1.91 for a single day before bouncing back the following day to above the $2 mark). This tumble in prices doesn’t seem to have an end in sight and with natural gas storage keeping stocking up it could mean the natural gas prices will remain below the $2 mark in the weeks to come.
Here is a summary of the recent U.S natural gas market provided by the EIA regarding the week ending on April 6th:
Natural Gas Storage
The underground natural gas storage (Billion Cubic Feet) continued to rose for the third consecutive weeks, last week the storage levels slightly increased by 2.39% or by 8 Bcf; the natural gas storage settled at 2,487 billion cubic feet for all lower 48 states; the current natural gas storage is 58.7% above the 5-year average, and is also 55.5% above the storage level during the same week in 2011. As a comparison, during the same week in April 2011 the total natural gas injection was 28 Bcf.
The increase in storage was primarily due to a 7 Bcf injection from the Eastern consumption region natural gas storage.
In the following chart are the developments in natural gas storage (weekly figures) and Henry Hub natural gas prices between the years 2011 and 2012. During the previous week the Henry Hub spot price declined by 4.4% to a weekly average price of $1.97/mmbtu. Furthermore, the Henry Hub price was $2.18/mmbtu below its price level the same week in 2011.
The average U.S natural gas consumption, on a national level, slipped by 0.71% (week over week) during last week. The power sector led the drop with a 9.88% decrease. The total demand for gas was 0.97% below the levels from the previous week but was 9.46% above the levels of the same week in 2011.
Production and Imports
Imports of natural gas fromCanadadeclined during last week by 2.73%; and the imports were also 1.98% below the levels in 2011.
The gross natural gas production edged up last week by 0.35%, and is 5.34% above the production level in 2011. As a result the total supply of natural gas increased by 0.11% during last week.
According to the report the natural gas rotary rig count decreased by 11; by the end of last week the number of natural gas rigs reached 647.
On a national level, the U.S temperatures were still 5.7 degrees warmer than 30-year normal, and 4.1 degrees warmer than the same week last year.
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