Prices over the report week were relatively stable across most of the country, with the Henry Hub day-ahead price trading within a 6 cent range over the week and in the end gaining a modest 2.0 percent, increasing from $2.49 per MMBtu the previous Wednesday to $2.54 per MMBtu yesterday. The exception was the Northeast, which seemed to be on a roller-coaster ride as substantial gains on Friday in likely anticipation of severe winter weather were followed by declines of a similar magnitude on Monday as the cold weather was replaced by more moderate temperatures. The Algonquin city gate price for delivery into Boston jumped from $3.74 per MMBtu on Thursday to $5.30 per MMBtu (42 percent) on Friday, only to retreat to $3.42 per MMBtu (35 percent) by Monday, and subsequently to close the week at $3.27 per MMBtu, down 72 cents from the previous Wednesday. Similarly, prices at Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City jumped from $2.92 per MMBtu on Thursday to $5.54 per MMBtu (90 percent) on Friday, retreated to $2.88 per MMBtu (48 percent) on Monday, and closed out the week at $2.84 per MMBtu, down 7 cents from the previous Wednesday.
At the NYMEX, the March 2012 contract traded within a 10.7 cent range and declined slightly over the week, from $2.448 per MMBtu last Wednesday to $2.425 per MMBtu yesterday, a drop of 2.3 cents (0.9 percent). The contract peaked on Tuesday at $2.532 per MMBtu (up 4.2 percent from the previous day), despite forecasts for milder temperatures and ample storage levels.
Colder temperatures, most notably over the weekend in the East, contributed to a significant increase in consumption for the week. According to estimates from Bentek, domestic natural gas consumption rose by 14.3 percent from last week, topping 100 Bcf on both Saturday and Sunday and averaging 91.7 Bcf over the week. While industrial and power sector consumption remained relatively steady over the week, the residential/commercial sector consumption jumped from 42.7 Bcf on Friday to 53.4 Bcf (24.9 percent) on Saturday and remained high on Sunday before beginning to ease off on Monday. The residential/commercial sector gained 21.1 percent overall for the week, while the power sector rose 12.3 percent, and industrial sector consumption registered a more modest 3.7 percent increase. The increases in power burn occurred predominately over the weekend in the Southeast, Texas, and Midcontinent regions, all of which experienced colder-than-normal weather.