The NYMEX futures price declined about 8 cents per MMBtu on the reporting week. The NYMEX December futures price fell from $3.776 per MMBtu last Wednesday to $3.692 per MMBtu yesterday. On Monday, the November contract expired at $3.471 per MMBtu, about 7 cents per MMBtu higher than the Henry Hub spot price. The 12-month strip (average of December 2012 to November 2013 contracts) fell slightly, starting at $3.861 per MMBtu last Wednesday and landing at $3.851 per MMBtu yesterday.
Total demand increased this report week, led by higher residential/commercial consumption. According to estimates from Bentek, average natural gas consumption for the nation rose this report week by 5.5 Bcf per day (9.1 percent) over the last week’s daily average. The rise resulted principally from a 5.7 Bcf per day (34.8 percent) week-on-week increase in average residential/commercial consumption. Average residential/commercial consumption began the week on Thursday, October 25 at 16.4 Bcf per day, jumping to 20.6 Bcf per day on Friday, October 26. It rose steadily to 24.3 Bcf per day on Tuesday, October 30, and ended the week yesterday at 23.1 Bcf per day.
By contrast, average daily power sector consumption fell this week in all regions of the country except for the Midwest and Southwest, where consumption rose (16.9 percent and 2.6 percent, respectively). Double-digit percentage declines in natural gas power burn occurred in the Pacific Northwest (10.4 percent), Texas (14.8 percent), and Midcontinent (10.1 percent).
Bentek estimates that average natural gas supply for this report week rose by 1.1 Bcf per day (1.5 percent) over last week. This resulted from a 0.7 Bcf per day (1.1 percent) increase in dry production, and a 0.3 Bcf per day (6.5 percent) increase in imports from Canada.
Working natural gas in storage increased to 3,908 Bcf as of Friday, October 26, according to EIA’s WNGSR, the highest recorded volume since EIA began keeping records. This represents an implied net injection of 65 Bcf from the previous week. This week’s injection was 8 Bcf above the 5-year (2007-2011) average injection of 57 Bcf, and 17 Bcf below last year’s injection of 82 Bcf. Inventories are currently 136 Bcf (3.6 percent) greater than last year at this time and 259 Bcf (7.1 percent) greater than the 5-year average.
All three storage regions posted increases this week, with the Producing and West Regions posting record high natural gas storage volumes. Inventories in the East, West, and Producing regions increased by 34 Bcf (the 5-year average net injection is 29 Bcf), 8 Bcf (the 5-year average net injection is 6 Bcf), and 23 Bcf (the 5-year average net injection is 22 Bcf), respectively. In the Producing region, working natural gas inventories increased 14 Bcf (4.9 percent) in salt cavern facilities and increased 10 Bcf (1.0 percent) in nonsalt cavern facilities.