Henry Hub prices fell during the week from $3.53 per MMBtu last Wednesday to $3.24 per MMBtu yesterday. The price hit its weekly low on Tuesday, January 29 at $3.14 per MMBtu, but rose again slightly at the end of the week. Most pricing points around the country followed a similar pattern as temperatures thawed across most of the lower 48 States.
During the report week supply remained flat and demand fell. Despite the cold weather in the beginning of the week east of the Mississippi, and high heating demand the first few days of the report week, residential and commercial consumption averaged out at 11.6 percent below last week, according to estimates from Bentek. Consumption of natural gas for electric power and industrial consumption also fell by 13.7 percent and 3.0 percent, respectively. Canadian imports fell 9.9 percent and LNG sendout remained at minimal levels. Production rose 1 percent week over week, but was 0.3 percent lower than the same time last year.
At the Nymex, the March 2013 contract moved into the front-month slot and ended the week at $3.335 per MMBtu. This was a decline of 21.9 cents. The February contract expired on January 29 at $3.226 per MMBtu, having lost 24.3 cents during its tenure as the near-month contract. Contracts across the board displayed a similar pattern. The 12-month strip (the average of all contracts between March 2013 and February 2014) also declined, ending the week at $3.653 per MMBtu
Working natural gas in storage decreased to 2,802 Bcf as of Friday, January 25, according to EIA's WNGSR. This represents an implied net withdrawal of 194 Bcf from the previous week. This week's net withdrawal was 16 Bcf larger than the 5-year average net withdrawal of 178 Bcf, and 45 Bcf larger than last year's average net withdrawal of 149 Bcf. Inventories are currently 202 Bcf (6.7 percent) less than last year at this time and 304 Bcf (12.2 percent) greater than the 5-year average of 2,498 Bcf.
All three storage regions posted declines this week. Inventories in the East, West, and Producing regions decreased by 129 Bcf (the 5-year average net withdrawal is 113 Bcf), 18 Bcf (the 5-year average net withdrawal is 20 Bcf), and 47 Bcf (the 5-year average net withdrawal is 46 Bcf), respectively. In the Producing region, working natural gas inventories decreased 16 Bcf (6.2 percent) in salt cavern facilities and decreased 31 Bcf (3.9 percent) in nonsalt cavern facilities.
Temperatures during the storage report week were 0.1 degree cooler than the 30-year normal temperature and 2.7 degrees cooler than the same period last year. Temperatures in the Lower 48 states averaged 33.0 degrees, compared to 35.7 degrees last year and the 30-year normal of 33.1 degrees. While overall temperatures were close to normal, temperatures varied somewhat across Census divisions. The East North Central Census division in the Midwest and the Middle Atlantic Census division in the Northeast were relatively cool, averaging 3.6 and 2.9 degrees cooler, respectively, than the 30-year normal. The West South Central division in the South and the Pacific Census division in the West were relatively warm, averaging 4.7 and 3.9 degrees warmer, respectively, than the 30-year normal. Heating degree-days nationwide were normal and 8.7 percent above last year.