The NYMEX Natural Gas futures price fell modestly week-over-week. The NYMEX price fell 6 cents over the report period, from $3.382 per MMBtu last Wednesday to $3.320 per MMBtu yesterday, Wednesday, December 19, possibly reflecting expectations of adequate supply. The near-month Nymex price ended 7 cents per MMBtu above the Henry Hub price.
12-Month Strip also fell by 6.2 cents over the report period and ended the week at $3.320 per MMBtu. The 24-Month Strip is also trading below $4.00 per MMBtu, closing at $3.768 yesterday.
Many natural gas spot prices in 2012 were below Henry Hub. Reflecting high levels of natural gas production, ample natural gas stocks, and an expansive natural gas delivery system, many regional price bases, relative to Henry Hub, have flattened or were negative this year. So far in 2012, the average Henry Hub price was $2.73 per MMBtu.
Total demand for the report week was essentially flat. According to Bentek estimates, overall natural gas consumption for the nation fell by 0.2 percent. The residential/ commercial sector, which is the biggest gas-consuming sector during the winter, consumed 0.8 percent more gas week-on-week. This was offset by a 2.5 percent decrease in natural gas consumption in the electric power sector.
Total supply for the report week showed a slight increase. Bentek estimates an overall supply increase of 0.6 percent for the report period, driven by increased production. U.S. gross and dry natural gas production were up 0.7 percent week-on-week. Imports from Canada were up 0.6 percent. They increased most substantially in the West where temperatures in Oregon and Washington were low relative to the previous report period.
Working natural gas in storage decreased to 3,724 Bcf as of Friday, December 14, according to EIA’s WNGSR. This represents an implied net withdrawal of 82 Bcf from the previous week, and is the fourth (and largest) withdrawal for this heating season.
This week’s net withdrawal was 62 Bcf smaller than the 5-year average net withdrawal of 144 Bcf, and 18 Bcf smaller than last year’s average net withdrawal of 100 Bcf. Inventories are currently 66 Bcf -- 1.8% -- greater than last year at this time and 345 Bcf -- 10.2% -- greater than the 5-year average.