Both supply and consumption decreased this week. Dry natural gas production remained relatively flat over the week, according to estimates from BENTEK Energy, LLC (Bentek), declining overall by 0.3 percent from last week’s level. However, dry gas production continues to remain well above year-ago levels, exceeding them by 8.2 percent. Imports from Canada declined by 4.4 percent and LNG sendout declined by 3.2 percent week over week. Imports from Canada and LNG imports are more than 31 percent below last year’s levels for the same week. While total consumption was down by 4.3 percent from the previous week, with power burn and residential/commercial consumption showing the largest decreases, total consumption dropped 15.8 percent between last Wednesday and yesterday as colder temperatures earlier in the week gave way to warmer weather. Power burn and residential/commercial consumption led the decline over the week as the need for natural gas and natural gas-fired electric power for space heating declined. Total consumption ended the report week 9.3 percent below last year’s levels.
At the NYMEX, prices increased over the week. The near-month (February 2012) futures contract, which expires Monday, increased from 2.472 per MMBtu last Wednesday to $2.729 per MMBtu yesterday, an increase of slightly over 10 percent. The March 2012 contract, which will move into the near-month position when the February contract expires on Monday, also increased by slightly over 10 percent, moving from 2.516 per MMBtu last Wednesday to 2.769 per MMBtu yesterday. The 12-month strip, the average of the 12 contracts between February 2012 and January 2013, increased from $2.848 per MMBtu last Wednesday to $3.120 per MMBtu yesterday, an increase of slightly less than 10 percent.
Working natural gas in storage fell to 3,098 Bcf as of Friday, January 20, according to EIA's WNGSR. This represents an implied net withdrawal of 192 Bcf. This is the largest implied net withdrawal of this year’s heating season and is 11 percent greater than the 5-year average implied net withdrawal of 173 Bcf. Inventories in all three regions posted declines, with the East region contributing the most to this week’s implied net withdrawal, with a decrease of 122 Bcf (a 7 percent decline from the previous week).
Despite the strong implied net withdrawal, stocks were 547 Bcf higher than the 5-year average level of 2,551Bcf, and 531 Bcf higher than last year at this time. Inventories in the Producing Region continue to stand out at 284 Bcf (33.9 percent) above the 5-year average of 837 Bcf. Stocks in the East and West Regions were above their 5-year averages by 202 Bcf (14.8 percent) and 61 Bcf (17.7 percent), respectively.
Temperatures during the week ending January 19 were 1.1 degrees warmer than the 30-year normal temperature and 1.0 degrees warmer than the same period last year. During the week, temperatures were a few degrees warmer than normal in most Census Divisions, with the exception of the South Atlantic and the Pacific Divisions, where temperatures were 0.4 and 1.7 degrees cooler than normal, respectively. Heating degree-days nationwide were down 4.0 percent from normal and 3.1 percent from last year.