Natural gas prices rose this week in response to National Weather Service predictions of two more weeks of winter temperatures. April 13 Natural Gas threw a fit this week first skyrocketing to $3.55 on Wednesday (2/27) before falling sharply to $3.40. Today marked another, less buoyant run to the upside, stalling at $3.50 and trailing.
Henry Hub price increased from $3.34 per MMBtu last Wednesday to $3.49 per MMBtu yesterday, an increase of 15 cents per MMBtu, or 4.5 percent. This marked the second consecutive report week of higher spot prices for the Henry Hub and most other U.S. trading points.
Currently, April 13 Nattie at $3.49 -- up $0.06 on the day and threatening upward motion.
Total demand for the report week was down, despite an increase in power sector consumption. According to Bentek estimates, overall natural gas consumption for the nation decreased by 2.4 percent. The residential/commercial sector, the biggest gas-consuming sector during the winter, consumed 4.7 percent less natural gas week-on-week. Natural gas consumption for the industrial sector also decreased, by 0.8 percent. However, consumption from the power generation sector increased by 1.2 percent.
The Mid-continent region faced colder temperatures week-on-week, while power sector demand for the Pacific Northwest was bolstered by low rainfall. Generally dry conditions likely contributed to the increase in demand for natural gas used for electric generation in the Northwest where a large portion of the generating mix comes from hydroelectric power, and the region’s forecasted water supply decreased following a dry January.
U.S. gross and dry natural gas production were down 0.5 percent. A net increase in imports from Canada of 0.3 percent also contributed to the overall supply decrease, with Canadian imports in the Northeast falling by 14.0 percent. LNG imports decreased by 31.3 percent, following last week’s 54.0 percent increase, due largely to warmer temperatures in the Northeast.
Working natural gas in storage declined to 2,229 billion cubic feet (Bcf) as of Friday, February 22, according to EIA’s Weekly Natural Gas Storage Report (WNGSR). An implied storage withdrawal of 171 Bcf for the week moved storage levels 307 Bcf below year-ago levels, and 308 Bcf above the 5-year average.