Futures Pricing --
Front month natural gas opened today at $3.80 amid weak trader instrest but found a spark near midday after trailing to $3.72. Active trading then sent the contract 12 cents higher to $3.85 where it found strong resistance and fell off to end the day up a penny at $3.81.
Positive storage news coupled with weak demand by power generators allowed the contract to fall within range of trader's targets. Expect July natural gas to range around $3.80 through midday tomorrow when the market will decide if another round of profit taking is ripe.
Averaging lowest lows and highest highs starting in January puts us at an average of $3.658 year to date. Taken one step further, an average of Tuesday's close of $3.71 and the year-to-date average of $3.658 equals one cent above EIA's 2013 price target of $3.68 at $3.69 exactly, hinting natgas is at or near its statistical floor. Click here for more...
Spot Prices --
Natural gas spot prices declined this week according to EIA.
The Henry Hub spot price began the report week on Wednesday, June 5, at $3.99 per MMBtu, and declined to $3.74 per MMBtu on Wednesday, June 12, amid moderate temperatures for most of the country.
Most other major trading hubs also saw prices decline by $0.15-$0.25 per MMBtu for the report week.
Total demand decreased week-on-week, as power demand declined.
According to Bentek estimates, overall natural gas consumption in the United States decreased by 3.3%, driven by a 4.5% decline in the power sector. Although power sector natural gas consumption increased across most of the country, this was offset by small declines in the Southeast and Midwest, and by a large decline in the Northeast.
Working natural gas in storage increased 95 Bcf to 2,347 Bcf as of Friday, June 7, according to EIA's WNGSR.
The 95 Bcf gain in storage levels was higher than both the 5-year average and year-ago stock changes for the week. Despite the large build, current inventories remain 587 Bcf -- 20.0% -- less than last year at this time and 58 Bcf -- 2.4% -- below the 5-year average of 2,405 Bcf.
Seasonal spring temperatures during the storage report week supported this week's net injection. Temperatures in the Lower 48 states were 1.7 degrees warmer than the 30-year normal temperature and 2.0 degrees warmer than the same period last year, and averaged 69.3 degrees for the week, compared to 67.3 degrees last year and the 30-year normal of 67.6 degrees.