The NYMEX November 2012 front-month natural gas contract has had a wild week but when all was said and done, remained essentially unchanged at $3.470 shedding only $0.005 week-over.
Henry Hub spot price two cents lower week-over at $3.24. Henry Hub spot price had been as high as $3.38 during the reporting week. The 12-month strip gained 0.018 cents to end the reporting period at $3.908. The natural gas rotary rig count, as reported by Baker Hughes Incorporated, declined by 15 rigs to 422 active units as of Friday, October 12.
Overall natural gas consumption dropped by 4%, as declines occurred in most major consuming sectors. Consumption of natural gas for electric power generation fell 2.7%, while residential and commercial use declined 9.5% due to weather-related declines in demand. Consumption increased by 0.2% in the industrial sector.
Total natural gas supply declined slightly this week, according to data from Bentek. Dry production declined by 0.2% and imports from Canada fell 5.2%. Liquefied natural gas (LNG) imports increased 12.7% this week, but averaged 220 million cubic feet per day, remaining a very small portion of the United States’ total supply.
All three storage regions posted increases this week. Inventories in the East, West, and Producing regions increased by 24 Bcf (the 5-year average net injection is 40 Bcf), 8 Bcf (the 5-year average net injection is 6 Bcf), and 19 Bcf (the 5-year average net injection is 24 Bcf), respectively. In the Producing region, working natural gas inventories increased 11 Bcf (4.2 percent) in salt cavern facilities and increased 8 Bcf (0.8 percent) in nonsalt cavern facilities.
Temperatures during the storage report week were 4.6 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 55.0 degrees, compared to 62.4 last year and the 30-year normal of 59.6 degrees. During the week, all but one of the Census divisions were cooler than the 30-year normal, particularly the West North Central and East North Central Census divisions in the Midwest, which averaged 11.1 and 8.6 degrees, respectively, cooler than the 30-year normal. In the Northeast, the New England Census division was relatively warm, averaging about a degree warmer than the 30-year normal. Heating degree-days nationwide were 50% above normal and 153% above last year.