Consistent with declining natural gas prices across most of the nation, the Henry Hub day ahead price fell 4.9 percent, from $2.24 per MMBtu the previous Wednesday to $2.13 per MMBtu yesterday. With the exception of last Thursday (when there was no change), the price fell consistently throughout the week as warmer temperatures moved across most of the country.
At the NYMEX, the April 2012 contract fell from $2.302 per MMBtu last Wednesday to $2.284 per MMBtu yesterday, a decrease of 1.8 cents (0.8 percent). There was some volatility during the week, however, with prices reaching a high of $2.324 on Friday before falling to a low of $2.269 the following Monday, then rebounding on Tuesday.
Natural gas prices continued to trend downward across most of the country throughout the week. An exception was for deliveries into the Pacific Northwest, where prices at the Sumas trading point (located in Washington State) fell toward the end of last week before rebounding on Monday, ending the week up 2 cents (0.9%). Prices for the Algonquin citygate, which serves Boston markets, began the week at $2.97 per MMBtu, rose 16 cents per MMBtu on Tuesday before dropping significantly, ending the week at $2.45 per MMBtu, down $0.52 per MMBtu for the report week. Similarly, spot prices at Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City started the week at $2.44 per MMBtu, then rose briefly before declining steadily throughout the balance of the week, closing yesterday at $2.21 per MMBtu (down 9.4 percent). The Chicago citygate spot price over the same period registered daily declines, finishing the week at $2.12 per MMBtu (down 8.6 percent).
After increasing modestly on Friday, consumption posted daily declines through Wednesday, registering an overall decline for the week. According to estimates from BENTEK Energy LLC (Bentek), domestic natural gas consumption fell by 13.1 percent from the previous week. The residential/commercial sector posted the largest decrease, 24.9 percent, while power and industrial sector demand ended the week down 4.1 percent and 3.7 percent, respectively.
U.S. imports from Canada were down 8.0 percent for the week, driven by a 46.2 percent drop in shipments to the Northeast, reflecting much warmer temperatures in that region, that offset comparatively modest increases to both the West and Midwest regions. In combination with essentially flat dry gas production and an overall drop in LNG sendout, this resulted in virtually no change in overall supply over the week. According to Bentek estimates, the week’s average total natural gas supply declined 0.1 percent from last week’s average. Compared with the same period last year, however, domestic weekly dry gas production was up 5.4 percent, and both total weekly imports from Canada and U.S. LNG sendout volumes were below last year’s levels, by 6.0 percent and 63.9 percent, respectively.