Prices at most trading locations oscillated over the report week, declining between last Wednesday and the weekend, then increasing through Tuesday and subsequently dipping on the last day of the report week. Although prices were up and down over the week, most closed higher than the preceding week. The Henry Hub price declined from $3.78 per MMBtu last Wednesday to a low for the report week of $3.72 per MMBtu on Thursday, increased to $3.92 per MMBtu on Tuesday and then declined, closing at $3.88 per MMBtu yesterday. Prices at Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City fell from $4.03 per MMBtu last Wednesday to $3.91 per MMBtu on Friday, jumped to $4.20 per MMBtu by Tuesday, and then closed at $4.13 per MMBtu yesterday. Similarly, the Chicago citygate price declined from $3.88 per MMBtu last Wednesday to $3.80 per MMBtu on Thursday, then climbed to $3.98 per MMBtu Tuesday, only to reverse direction and fall to $3.91 per MMBtu yesterday.
Natural gas demand for power burn increased across the country during the report week. According to data from BENTEK Energy Services, LLC, gas burn for power increased overall by 11.1 percent, driven by increases in the Northeast and Southeast. Power burn in the Northeast rose by 28.0 percent, while the Southeast registered a 7.5 percent gain. Total demand was up by a much more modest 1.2 percent over the week. Supply remained flat, with production up by only 0.1 percent. Most of the increased demand was satisfied by imports from Canada, which increased by 5.1 percent. LNG imports rose by 17.8 percent and averaged 463 million cubic feet (MMcf)/day, while exports to Mexico jumped 32.2 percent and averaged 1460 MMcf/day over the week.
At the NYMEX, the November 2011 contract moved into the near-month spot, and dropped from $3.820 per MMBtu last Wednesday to $3.799 per MMBtu yesterday. The October contract closed at $3.759 per MMBtu yesterday, up only slightly from its 3.730 close last Wednesday. The 12-month strip (the average of the 12 contracts between November 2011 and October 2012) remained relatively steady over the week, closing at $4.133 per MMBtu last Wednesday and $4.136 per MMBtu yesterday.
Working natural gas in storage rose to 3,312 Bcf as of Friday, September 23, according to EIA’s WNGSR (see Storage Figure). Following a net injection of 111 Bcf from the previous week, stocks are now 91 Bcf below last year and 5 Bcf above the 5-year average. The injection was much larger than the 5-year average injection of 71 Bcf and last year’s injection of 73 Bcf.