Most trading locations across the country saw declining prices over the week, with the Henry Hub price falling from $3.65 per MMBtu last Wednesday to $3.39 per MMBtu yesterday. Slight upticks on Friday and Monday gave way to larger declines for the rest of the report week. The Northeast, where an early season snowfall moved in and propelled prices upward going into and over the weekend, was a departure from the overall decline. A price increase of 39 cents per MMBtu was posted at the Algonquin citygate in Massachusetts last Friday, and it increased another 12 cents over the weekend to reach a high of $5.00 per million Btu on Monday. As prices at other locations continued to fall throughout the week, prices in the Northeast did not ease off until Tuesday. By yesterday, the Algonquin citygate price had retreated to $4.19 per MMBtu.
At the NYMEX, the December 2011 contract declined 2.6 cents from $3.775 per MMBtu last Wednesday to $3.749 per MMBtu yesterday. The November 2011 contract expired at $3.524 per MMBtu on October 26, having lost 22 cents over its tenure as the near-month contract.
While most trading locations, including the Northeast, continued to decline towards the end of the report week, price increases at several Rocky Mountain and Midcontinent pricing points yesterday made them the exception to the rule. These pricing points were likely responding to a large weather system heading south out of Canada. The most notable increase was a 43 cent spike at the Northwest Sumas pricing point. This was its first price spike of the season and came particularly early. The higher prices in this part of the country caused strong increases in Ruby pipeline flows, which reached a record flow level of 1.0 Bcf per day, according to BENTEK Energy Services, LLC (BENTEK). Increased flows to the West on Ruby coincided with a drop in the Rockies Express Pipeline (REX) outflows to the East, which registered flows below 1.1 Bcf per day. Natural gas flows on REX fell to their lowest levels since early February, according to BENTEK.
Likely due to colder temperatures in parts of the country, consumption increased over the report week. According to estimates from BENTEK, domestic gas consumption increased by 12.6 percent over last week. Most of the increase was attributed to increases in demand in the residential/commercial sector, which posted an increase of over 30 percent. Power burn was down slightly over last week, and the industrial sector posted a gain of 2.6 percent. Exports to Mexico increased slightly over last week and averaged just over 1200 million cubic feet (MMcf) per day.