At the NYMEX, the June 2012 contract rose from $2.465 per MMBtu last Wednesday to $2.618 per MMBtu yesterday, an increase of 15.3 cents (6.2 percent). While relatively steady late last week, prices increased significantly over the past three days, rising 18.7 cents from Monday to yesterday’s close. The 12-Month Strip (average of June 2012 to May 2013 contracts) closed yesterday at $3.167 per MMBtu, up 8.9 cents per MMBtu (2.9 percent) for the week.
Prices at many downstream trading locations generally rose, dropping on Friday before rebounding, typically closing much higher by the end of the week. For example, spot prices at the Algonquin Citygate trading point for delivery into Boston, which started the week at $2.59 per MMBtu, fell to $2.01 per MMBtu on Friday and then rose for the much of the remainder of the period to close yesterday at $2.78 per MMBtu (up 7.3 percent for the week). Similarly, prices at the Transcontinental Pipeline’s Zone 6 trading point (which serves New York City markets) declined from $2.46 per MMBtu last Wednesday to $2.43 per MMBtu on Friday, then climbed to $2.64 per MMBtu by week’s end (up 7.3 percent).
Total consumption for the report week registered an overall decline, as an increase in industrial sector demand was offset by decreases in other sectors. According to estimates from Bentek, domestic natural gas consumption fell by 5.1 percent from last week, driven by a decline of 10.9 percent in power sector consumption and a 1.9 percent decline in the residential/commercial sector. Industrial sector consumption ended the week up 1.2 percent, 0.7 percent above last year’s consumption for the same week.
Total supply was essentially unchanged for the week, registering an overall increase of 0.3 percent, reflecting a small increase in dry gas production. According to Bentek estimates, domestic weekly dry gas production was 0.2 percent higher than the previous week (and 3.7 percent above the same time last year). Imports from Canada also rose only modestly, with an increase in shipments to the West being mostly offset by declines in the Midwest and Northeast. For the week, imports from Canada stand 1.5 percent above year-ago volumes. While liquefied natural gas (LNG) sendout rose sharply - up 36.0 percent from last week - sendout volumes remain 57.5 percent below year-ago levels.
Working natural gas in storage increased to 2,667 Bcf as of Friday, May 11, according to EIA's WNGSR. This represents a net injection of 61 Bcf from the previous week. This week’s injection was 30 Bcf lower than the 5-year (2007-2011) average injection for the same week. During the same week last year, the implied net injection was 86 Bcf. Working inventories are currently 774 Bcf (41 percent) greater than their year-ago levels and 773 Bcf (41 percent) greater than the 5-year average.