Futures Pricing --
September 13 natural gas opened today at $3.34 and moved sharply higher, adding 7 1/2 cents all told to end the day at $3.418. The chart is beginning to look like it had for much of the first part of 2013 with traders forging a hump and playing the rise and fall.
We have advised to be at least 80% filled on natgas and propane needs for fall dryers. The National Weather Service Climate Prediction Center expects above average precip for September, October and November. Demand for fuel to dry crops is expected to be high. LP added 3 1/2 cents to the regional average this week and natgas is threatening upside action.
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Spot Prices --
With continued below-normal summer temperatures for much of the country, natural gas spot prices at most trading locations remained flat compared to last week.
The Henry Hub spot price ended the report week (Wednesday, August 7, to Wednesday, August 15) at $3.36 per MMBtu, up 4 cents per MMBtu from $3.32 per MMBtu at the beginning of the report period.
Increased power-sector demand raised total consumption 1.8% compared to last week. Natural gas demand was up, driven by a 3.1% increase in electric-sector consumption.
Texas and the Mid-continent regions both consumed 10.3% less gas for electricity generation than the week before. Every region except the Pacific Northwest is consuming less natural gas for this sector than a year ago. Nationally, the electric sector is consuming 13.6% less gas than a year ago.
Working natural gas in storage increased to 3,006 Bcf as of Friday, August 9, according to EIA's WNGSR. The 65-Bcf gain in storage levels was significantly higher than both the 20-Bcf injection that occurred during the same week in 2012 and the 5-year average increase of 42 Bcf. Current inventories are 252 Bcf (7.7%) less than last year at this time and 43 Bcf (1.5%) above the 5-year average of 2,963 Bcf.
The net injection was smaller than market expectations at 65 Bcf on an expected 70 Bcf build.
Marginally cooler-than-normal temperatures during the storage report week supported this week's greater-than-average net injection. Temperatures in the Lower 48 states averaged 0.9 degrees cooler than the 30-year normal temperature and 4.0 degrees cooler than the same period last year, and averaged 74.1 degrees for the week, compared to 78.1 degrees last year and the 30-year normal of 75.0 degrees, EIA said.