Weekly Natural Gas Report -- 1/31/2013

January 31, 2013 07:44 AM

 nattiefutures1 31

The March 2013 New York Mercantile Exchange Natural Gas contract moved into the front-month slot and fell from $3.554 per MMBtu last Wednesday to $3.335 per MMBtu yesterday. The February contract expired on January 29 at $3.226 per MMBtu.

Natural gas prices fell across the board this week. Cold weather in the Northeast, which had driven prices in New York and New England above $30 per million British thermal unit (MMBtu) earlier in the report week, relented and prices dropped back to the single digits.

The Henry Hub price declined 29 cents during the report week to end at $3.24 per MMBtu.

Demand/Consumption --natties d1 31

High demand caused Transcontinental Pipeline to issue a system-wide operational flow order on January 24 to correct imbalances. The OFO was lifted the next day. Pipeline imports from Canada helped fill the need for more natural gas. Imports on Wednesday, January 24 and 25 were about 1.7 Bcf/d, almost twice the level at the end of the week when the weather warmed up.

Despite the cold weather in the beginning of the week east of the Mississippi, and high heating demand the first few days of the report week, residential and commercial consumption averaged out at 11.6 percent below last week, according to estimates from Bentek. Consumption of natural gas for electric power and industrial consumption also fell by 13.7 percent and 3.0 percent, respectively.

Canadian imports fell 9.9 percent and LNG sendout remained at minimal levels. Production rose 1 percent week over week, but was 0.3 percent lower than the same time last year.

Storage --

Working natural gas in storage decreased to 2,802 Bcf as of Friday, January 25, according to EIA's WNGSR. This represents an implied net withdrawal of 194 Bcf from the previous week. This week's net withdrawal was 16 Bcf larger than the 5-year average net withdrawal of 178 Bcf, and 45 Bcf larger than last year's average net withdrawal of 149 Bcf. Inventories are currently 202 Bcf (6.7 percent) less than last year at this time and 304 Bcf (12.2 percent) greater than the 5-year average of 2,498 Bcf.

All three storage regions posted declines this week. Inventories in the East, West, and Producing regions decreased by 129 Bcf (the 5-year average net withdrawal is 113 Bcf), 18 Bcf (the 5-year average net withdrawal is 20 Bcf), and 47 Bcf (the 5-year average net withdrawal is 46eialogo Bcf), respectively. In the Producing region, working natural gas inventories decreased 16 Bcf (6.2 percent) in salt cavern facilities and decreased 31 Bcf (3.9 percent) in nonsalt cavern facilities.



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