The Nymex futures price increased week-on-week. The Nymex March contract price increased by 15 cents per MMBtu, from $3.279 per MMBtu last Wednesday to $3.427 per MMBtu on Tuesday, February 26, 3 cents per MMBtu below the Henry Hub spot price. The Nymex April contract, which replaced the March contract as the new near-month contract yesterday, closed trading at $4.434 per MMBtu, 10 cents per MMBtu or 3.1 percent above its $3.331 per MMBtu price on Wednesday, February 20. The 12-Month Strip (the average of the April 2013 to the March 2014 contract) rose by 10 cents per MMBtu or 3.1 percent, from $3.331 per MMBtu last Wednesday to $3.434 per MMBtu yesterday.
Total demand for the report week was down, despite an increase in power sector consumption. According to Bentek estimates, overall natural gas consumption for the nation decreased by 2.4 percent. The residential/commercial sector, the biggest gas-consuming sector during the winter, consumed 4.7 percent less natural gas week-on-week. Natural gas consumption for the industrial sector also decreased, by 0.8 percent. However, consumption from the power generation sector increased by 1.2 percent. Power burn fell by 7.3 percent in the Midwest, 3.8 percent in the Southeast, and 2.0 percent in the Rockies, but these declines were outweighed by a 36.3 percent power burn increase in the Pacific Northwest and a 28.1 percent power burn increase in the Midcontinent, plus additional power burn increases in the Southwest (3.8 percent) and the Northeast (2.9 percent). The Midcontinent region faced colder temperatures week-on-week, while power sector demand for the Pacific Northwest was bolstered by low rainfall. Generally dry conditions likely contributed to the increase in demand for natural gas used for electric generation in the Northwest where a large portion of the generating mix comes from hydroelectric power, and the region’s forecasted water supply decreased following a dry January.
Total supply for the report week decreased slightly. Bentek estimates an overall supply decrease of 0.6 percent for the report period. U.S. gross and dry natural gas production were down 0.5 percent. A net increase in imports from Canada of 0.3 percent also contributed to the overall supply decrease, with Canadian imports in the Northeast falling by 14.0 percent. LNG imports decreased by 31.3 percent, following last week’s 54.0 percent increase, due largely to warmer temperatures in the Northeast.