Natural Gas Report -- May '13 Futures Decline

April 4, 2013 11:35 AM

Pricing --

Natural gas prices declined across most of the country. The Henry Hub spot price decreased from $4.08 per MMBtu last Wednesday to $4.00 per MMBtu yesterday, reversing its general increasing trend of the prior 6 weeks. Outside the Northeast, spot prices almost universally fell week-over-week, but declines were moderate.

The 12-Month Strip (the average of May 2013 to April 2014 contracts) similarly declined over the report period, decreasing by 13 cents per MMBtu and ending the week at $4.106 per MMBtu.

The May 13 natural gas contract was a topic of conversation in this week's Monitor as the contract roared through psychological resistance at $4.00 on the last trading day of March to set a fresh contract high at $4.121. the rise was due in part to winter's long tail and profit taking on long positions. May nattie has since backed off. The Monitor's article 'May 2013 Natural Gas Futures Update -- Not as Think as You Predictable It Is' is worth a look if you haven't yet seen it and while it might sound like Yoda wrote the title of that article -- it may take a Jedi to figure this contract out.

May 13 natural gas closed today 52 cents higher at $3.958.

Consumption --

Domestic consumption decreased 16.3 percent over the previous week, with declines in all of the consuming sectors. Use of natural gas for power generation declined 11.3 percent, with large declines in the Southeast. Residential and commercial consumption averaged 25.0 percent lower than last week but was still 39.0 percent higher than a year ago.

Storage --

Natural gas supply remained mostly flat over the week, with increases in production offsetting declines in Canadian imports. Dry production increased by 1.0 percent from the previous week and is up 2.2 percent over its year-ago levels, according to BENTEK Energy Services LLC (Bentek) data. Canadian imports declined 5.7 percent over the previous week.


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