Natural Gas Report -- May 2013 Contract Sets Fresh High...Again

April 11, 2013 10:56 AM

Pricing --

At the Nymex, the price of the May 2013 futures contract rose from $3.900 per MMBtu last Wednesday to $4.085 per MMBtu yesterday. Similarly, the 12-month strip (the average of the 12 contracts between May 2013 and April 2014) increased from $4.106 per MMBtu to $4.239 per MMBtu.

Natural gas prices increased at most market locations across the country, with more pronounced weather-driven increases in the middle of the country. A large snowstorm hit much of the Rocky Mountain, Midcontinent, and Midwest regions near the end of the report week, which drove up natural gas prices in these regions. Prices at most points in the Rockies increased more than 20 cents per MMBtu; for example, prices at the Opal trading point in Wyoming (one of the most widely traded points in the region) rose 21 cents per MMBtu on the week

May 13 natural gas opened today at $4.102 and clipped fresh resistnce at $4.185 before sliding to close $0.072 higher on the day at $4.174.

Consumption --

Domestic consumption fell by 10.6 percent, led by weather-related declines in residential and commercial consumption. Consumption of natural gas for power generation rose slightly, but was 19.6 percent less than last year’s unusually high April levels. Overall, this year natural gas power generation has remained below 2012 levels, and coal has regained some of the market share it lost last year when natural gas prices hit historically low levels in the spring.

Storage --

Working natural gas in storage decreased to 1,673 Bcf as of Friday, April 5, according to EIA's WNGSR. This represents an implied net withdrawal of 14 Bcf from the previous week. Both the 5-year average and year-ago stock changes for the week were implied net injections of 15 Bcf and 11 Bcf, respectively. Inventories are currently 804 Bcf (32.5 percent) less than last year at this time and 66 Bcf (3.8 percent) below the 5-year average of 1,739 Bcf.

Temperatures during the storage report week were 1.3 degrees cooler than the 30-year normal temperature and 7.4 degrees cooler than the same period last year. Temperatures in the Lower 48 states averaged 47.6 degrees, compared to 55.0 degrees last year and the 30-year normal of 48.9 degrees. While overall temperatures were about a degree cooler than normal, temperatures varied somewhat across Census divisions.


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