Natural Gas Report -- April 13 Natural Gas Breaches $4.00

March 22, 2013 06:35 AM

Pricing --

Natural gas prices were up across the report week (Wednesday to Wednesday). Prices increased by around 25 to 30 cents per million British thermal units (MMBtu) at most price points, with the exception of Northeastern points, which rose more substantially. The Henry Hub closed at $3.96 MMBtu Wednesday, up 24 cents for the week. NGJ13 3 22

The 12-Month Strip (the average of April 2013 to March 2014 contracts) similarly rose over the report period, increasing by 22 cents per MMBtu and ending the week at $4.139 per MMBtu.

April 13 Natural gas crossed psychological resistance at $4.00 both yesterday and today and quickly retreated each time. Yesterday -- Thursday -- the contract topped at $4.02; Today the contract topped at $4.01 setting targeted trendline resistance at $4.00 even. These spikes have typically coincided with high volume selloffs, but today's run-up to $4.01 faded without volume taking much notice suggesting upside potential has been exhausted.

Right now (11:30amCT) April nattie is at $3.97 after opening the day at $3.93.

Consumption --20130321 Supply3 22

EIA reported weekly drawdowns 10 Bcf below projections for the report week. U.S. stockpiles remain 21% below year-ago but are 9.5% above the bottom end of the five-year average. But total demand for the report week was up. According to BENTEK Energy Services LLC (Bentek) estimates, overall natural gas consumption for the nation increased by 2.1%. The residential/commercial sector, the biggest gas-consuming sector during the winter, consumed 5.1% more gas for the report period. The Midwest and Northeast experienced colder weather than last week, pushing residential/commercial demand higher.

Storage --

Working natural gas in storage decreased to 1,876 Bcf as of Friday, March 15, according to EIA's WNGSR. This represents an implied net withdrawal of 62 Bcf from the previous week. This week's net withdrawal was 36 Bcf larger than the 5-year average net withdrawal of 26 Bcf, and 62 Bcf larger than last year's average net withdrawal of zero. Inventories are currently 502 Bcf -- 21.1% -- less than last year at this time and 162 Bcf -- 9.54% -- greater than the 5-year average of 1,714 Bcf.


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