October 13 natural gas opened today at $3.58 and pushed upward against the July 26 daily high of $3.66 and fell hard at midday. By the close, natgas had retraced its earlier upward steps to close the day up 4 cents to $3.62.
Keep an eye on spot prices -- If tensions in Syria cause a crude oil spike, traders following the 'sell the news' line of thought will pressure prices lower as they exit the market on a round of fear factor profit-taking. This threatens to elevate natgas futures proportionally to WTI's pullback in that event.
Wet Harvest -- The prospect of a wet harvest looms even as persistent dryness becomes a concern to this immature crop who just needs a break. If forecasters are correct, a wet fall is ahead signaling strong demand for natgas and LP for dryers. We have been waiting on an upside natgas recovery, and profit-taking on violence in Syria could impact the bottom line on your farm if natgas suddenly turns bullish.
According to EIA, The Henry Hub spot price increased by 3 cents per MMBtu Wednesday-to-Wednesday, closing the report week at $3.54 per MMBtu. Prices at most locations decreased over the weekend but then increased on Monday, and closed trading yesterday above week-ago levels. A big drop over the weekend took place in the Northeast, where temperatures fell over the weekend to 70 degrees Fahrenheit, from 77 degrees at the beginning of the report week.
At the Nymex, the price of the September 2013 contract increased slightly. The price of the September 2013 contract rose for the third consecutive report week, from $3.460 per MMBtu last Wednesday to $3.567 per MMBtu yesterday, its final day as the front-month contract, according to EIA.
Consumption in all sectors declined during the report week, according to Bentek estimates. Total consumption decreased by 4.5% from the previous week. For the week, the power sector fell most noticeably by 8.4%.
Driven by low power burn during the first four days of the report week, total weekly power burn in the Northeast, Southeast, and Texas decreased by 8.5%, 19.3%, and 14.3%, respectively, likely in response to cooler temperatures in these regions from the previous week. Power burn in the Rockies and the Southwest increased by 9.3% and 17.1%, respectively, because of warmer temperatures, EIA said.
Working natural gas in storage increased to 3,130 Bcf as of Friday, August 23, according to EIA's WNGSR. The 67-Bcf gain in storage levels was slightly higher than both the 64-Bcf injection that occurred during the same week in 2012 and the 5-year average increase of 66 Bcf. Current inventories are 235 Bcf (7.0%) less than last year at this time and 45 Bcf (1.5%) above the 5-year average of 3,085 Bcf.
The net injection was larger than market expectations, which on average were reported to be around 62 Bcf.
Near normal temperatures during the storage report week supported this week's close-to-average net injection. Temperatures in the Lower 48 states averaged 0.3 degree cooler than the 30-year normal temperature and 0.6 degree warmer than the same period last year, and averaged 73.4 degrees for the week, compared to the 30-year normal of 73.7 degrees and 72.9 degrees last year, EIA said.
Data, graph and partial text provided by EIA.