At the NYMEX, the April 2012 contract fell from $2.616 per MMBtu last Wednesday to $2.302 per MMBtu yesterday, a decrease of 31.4 cents (12.0 percent). The most substantial drop was a loss of 12.9 cents on Monday, likely as a result of forecasts for extended warm weather across all but the western portions of the country.
The recent downtrend in natural gas prices continued across most of the country through the week with few exceptions. The most notable exception was for deliveries into the Northeast, where many trading points saw double digit gains on both Friday and Monday, likely as a result of cooler temperatures. These were followed by sharp reversals as the cold temperatures were replaced by warmer weather, with Northeast prices ending the week down. A storm moving into the West likely led to some single digit gains at a number of Western trading locations on Monday, but overall the Western hub prices declined on the week along with the rest of the country. The Algonquin citygate price for delivery into Boston, which began the week at $3.37 per MMBtu, jumped 30 cents per MMBtu last Thursday, 31 cents on Friday, and 70 cents on Monday before falling by $1.56 per MMBtu on Tuesday and subsequently ending the week at $2.97 per MMBtu, down $0.40 per MMBtu for the report week. In contrast, spot prices at Transcontinental Pipeline's Zone 6 trading point for delivery into New York City started the week at $2.66 per MMBtu, traded during the week (Wednesday to Wednesday) within a 25 cent per MMBtu range, and closed the week yesterday at $2.44 per MMBtu (down 8.3 percent). Over the same period, the Chicago citygate spot price registered an 18 cent per MMBtu price loss, ending the week at $2.32 per MMBtu (down 7.2 percent), and the Northwest Sumas spot price declined 33 cents per MMBtu,to end the week at $2.16 per MMBtu (down 13.3 percent).
Although showing substantial gains on Sunday and Monday, consumption had dropped significantly by yesterday and registered an overall decline for the week. According to estimates from BENTEK Energy LLC (Bentek), domestic natural gas consumption fell by 3.2 percent from last week. The residential/commercial sector decreased the most with a 5.4 percent decline, while the industrial sector declined by 2.0 percent, and the power sector ended the week with a 0.8 percent decline.
Despite an increase in imports from Canada, a decrease in dry gas production and lower LNG sendout led to a decline in overall supply over the week. According to Bentek estimates, the week's average total natural gas supply declined 0.8 percent from last week's level, led by a 0.7 percent decrease in dry gas production. Although down for the week, domestic weekly dry gas production was 7.5 percent above this time last year. The decrease in this week's dry gas production was partially offset by a 1.9 percent increase in imports from Canada, with the highest volumes flowing into the Northeast as temperatures fell on Monday and Tuesday. Imports from Canada stand 8.2 percent above year-ago volumes for the same week. Despite the colder temperatures in the Northeast, U.S. LNG sendout declined 34.8 percent over the week and remained 68.5 percent below year-ago levels.