Natural Gas Tumbled Down Below $4.8

The price of natural gas changed course and fell during the second half of the week and fell below the $4.8 mark – the lowest level in the past couple of weeks. The average weekly price was still 4.1% higher than last week. In the recent EIA report, the natural gas storage tumbled down by 270 Bcf. Last week’s withdrawal was much higher than last year’s and the five year average pace. The high volatility in the natural gas market is likely to continue in the next couple of weeks.

The Nymex Henry Hub Future (short term delivery) fell by 3.4% and reached by Friday $4.78/mmbtu; its average daily change was -0.55%; its weekly average rate was 1.5% below last week’s average price.

The gap between the NG future and spot prices – future minus spot – was in Backwardation during last week.

Natural Gas Charts

The following charts present the developments in Nat-gas future (Nymex Henry Hub) in $/mmbtu during February 3-7.

Natural Gas price  chart - February 3-7 2014As you can see from the chart herein, the natural gas price (Henry Hub future rate) dropped mainly at the end of the week.


In the second chart are the daily percent changes of the Nymex Henry Hub future (short term delivery).

Natural Gas chart - percent change February 3-7 2014The underground natural gas storage (Billion Cubic Feet) dropped again for the twelfth consecutive time this season during last week by 12.3% or by 270 Bcf; the storage reached 1,923 billion cubic feet for all lower 48 states; the current storage is 22.4% below the 5-year average and is 28.8% lower than the storage during the same week in 2013. The latest withdrawal was much higher than last year and than the five year average: During the same week in January 2013the natural gas extraction was 118 Bcf, and the five year average extraction from storage for the same week of January was 143 Bcf. This week’s extraction was mostly due to the eastern consuming region, in which the extraction was 143 Bcf.

Weather and natural gas

The current forecasts are that the temperatures are expected to remain lower than normal in most of the East, but could above normal in most parts of the West. Considering the expected lower than normal temperatures for the season; the demand for natural gas in the residential/commercial sector in central of the U.S. could remain elevated in the coming weeks. Finally, last week’s heating degrees days were estimated to be higher than normal and last year’s.

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