The NYMEX November 2012 front-month natural gas contract for today, October 26 again in search of a new range. Key support has been violated already today in early morning action, but as old man winter moves across the nation and temperatures begin to fall in earnest, look for increased demand for home heat in the next week to push nattie to the upside.
As of now (9am CT), front-month November natural gas falling at 3.49, but is due for a move higher. As I have said before, if natural gas can catch a draft, moves of ten points or more are a near certainty.
Henry Hub rose from $3.24 per MMBtu Wednesday (October 10) to $3.43 per MMBtu yesterday (October 17), a 6% increase of 19 cents per MMBtu. Many trading points increased by around 20 cents per MMBtu, due mostly to a large bounce from Tuesday to Wednesday (October 17) on news of a coming cold-snap. Southern California spot prices were flat or slightly falling, with SoCal Citygate closing the week at $3.72 per MMBtu, down four cents per MMBtu.
Overall natural gas consumption dropped by 2.9% during the reporting week. Temperatures across most of the nation were in energy no-man's land as it was too warm for heating, but too cool for air conditioning. Consumption of natural gas for electric power generation fell 2.8% on falling air conditioner use, while residential and commercial use declined 9.5%, driven lower by milder temps and fewer consumers turning up the heat. Consumption decreased by 0.9% in the industrial sector.
Total natural gas supply slightly lower this week on a 4.7% reduction on imports from Canada, according to data from Bentek. Dry production was higher week-over by 0.3%. The Western region, which typically takes the lead in natural gas imports fell 6.5%, offsetting gains in production to the low side.
All three storage regions posted increases again this week. Inventories in the Eastern region increased by another 28 Bcf -- 5-year average net injection is 35 Bcf; The West added 11 Bcf -- 5-year average injection is 6 Bcf; Producing Southern region increased by 28 Bcf -- 3 points above the the 5-year average net injection of 25 Bcf. Producing region's working natural gas inventories increased 15 Bcf (5.5%) in salt cavern facilities and increased 13Bcf (1.4%) in nonsalt cavern facilities.