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Natural Gas Report: Cooler Weather Chases Natgas Higher

October 24, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

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  • Inventories stand at 3,741 Billion cubic feet (Bcf) -- 2.4% below year-ago and 2.1% above the five-year average.
  • This week notes an 87 Bcf gain in storage, much larger than last year's 64 Bcf build during the same period last year.
  • Natural gas spot prices rose over the report week at most locations as cool weather slinks across the nation.
  • November '13 WTI crude opened today at $97.10 with the Brent/WTI spread firming this week to $10.60.

 

November 13 natural gas opened today at $3.617 and once again chopped higher since. Resistance slowed the uptrend at $3.64 and prices faded into the close to end the day at $3.628.

Prices --

Henry Hub spot prices softened 19 cents to $3.66 during the Wed-Wed report week. Nymex prices softened 6 cents to end the report week at $3.619. The price of the 12-month strip (the average of the 12 contracts between November 2013 and October 2013) fell from $3.948 per MMbtu last Wednesday to $3.802 per MMBtu yesterday, according to EIA.

Consumption --20131024 Supply

Consumption increased by 9.4% from the previous week, driven by the increase of natural gas consumption in the residential and commercial sectors, according to data from Bentek Energy. Natural gas consumption in the residential and commercial sectors increased by 30.4%, likely due to cooler temperatures in the northern United States. During the report week, natural gas consumption for power generation decreased by 2.7%. Even though power burn in the Midwest and Pacific Northwest increased by 30.5% and 29.4%, respectively, the decrease of power burn in Texas was larger and resulted in the overall decrease of total power burn for the week. U.S. natural gas exports to Mexico and natural gas consumption in the industrial sector increased modestly by 2.6% and 3.3%, respectively, EIA said.

Storage --

Working natural gas in storage increased to 3,741 Bcf as of Friday, October 18. The 87-Bcf gain in storage levels was significantly larger than the 64-Bcf injection that occurred during the same week in 2012 and larger than the 5-year average increase of 67 Bcf. Current inventories are 92 Bcf (2.4%) less than last year at this time, but 77 Bcf (2.1%) above the 5-year (2008-12) average of 3,664 Bcf, according to EIA.



Data, supply graph and indicated text provided by EIA.

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