At the NYMEX, the May 2012 contract fell from $2.141 per MMBtu last Wednesday to $1.984 per MMBtu yesterday, a decrease of 15.7 cents (7.3 percent). The May 2012 contract led the downturn in the futures market over the week and dipped below $2.00 for the first time in 10 years. The 3-Month Strip (average of May-June-July contracts) also reflected the price decline with a 15.9 cent loss for the week.
Nearly all downstream trading locations registered lower prices as mild weather loads continued this week. Spot prices at Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City, which started the week at $2.32 per MMBtu , showed a $0.23 per MMBtu price loss over the week (Wednesday to Wednesday) to close at $2.09 per MMBtu (down 9.9 percent). Over the same period, the Chicago citygate spot price registered an 18 cent per MMBtu price loss (from $2.20 per MMBtu last Wednesday), ending the week at $2.02 per MMBtu (down 8.2 percent).
In the midst of seasonal April temperatures throughout most of the country during the past week, total consumption decreased slightly. According to estimates from BENTEK Energy LLC (Bentek), domestic natural gas consumption fell by 0.7 percent from last week. The power sector led the decline, posting a 9.9 percent loss due to a decrease in power burn in all regions except the Pacific Northwest. However, the residential/commercial sector showed a 7.9 percent week-over-week gain, while the industrial sector registered a 1.2 percent increase.
Total supply was up slightly for the week due to a small increase in dry gas production. According to Bentek estimates, the week’s average total natural gas supply posted a 0.1 percent increase from last week’s level, led by a modest increase in dry gas production. Domestic weekly dry gas production averaged 63.9 Bcf per day, 0.3 percent higher than the previous week and 5.4 percent above this time last year. The increase in this week’s dry gas production was offset by a 2.7 percent decrease in imports from Canada, which averaged 5.1 Bcf per day over the period. Imports from Canada stand 2.0 percent below year-ago volumes for the same week. There was a 0.6 percent decrease in supply of liquefied natural gas (LNG) during the week, where sendout averaged 289 MMcf per day; however, sendout volumes remain 56.6 percent below year-ago levels.
Working gas in storage increased to 2,487 Bcf as of Friday, April 6, according to EIA’s WNGSR. This represents a net injection of 8 Bcf from the previous week. The injection this week is less than the five-year (2007-2011) average injection of 22 Bcf for the week, but slightly greater than last year’s net injection of 7 Bcf. Working inventories are currently 888 Bcf greater than their levels last year at this time and 920 Bcf greater than the five-year average.