Weekly Natural Gas Report -- Week Ended 10/10/2012

October 12, 2012 08:49 AM


The NYMEX November 2012 natural gas contract has rallied strongly week-over-week. Near-contract natural gas had been flirting with upside potential and made its breakout on Thursday as this EIA data was being compiled. Click here for Inputs Monitor's analysis of the NYMEX natural gas near-contract pricing action.

Henry Hub spot price increased over the reporting week up 1.5 percent to $3.26.

Demand --

Total demand increased on higher residential/commercial consumption. This increase resulted from a 5.9 Bcf per day week-over useage uptick as residential/commercial consumers reached for the thermostat. That is a 44% increase in the sector week-over. Estimates from BENTEK Energy Llc. had natural gas consumption nationwide rising by 3.5 Bcf/day -- 5.9 percent over the last week's daily average.

Consumption --

Natural gas consumption rose in the reporting period -- average national natural gas consumption rose 3.5 Bcf week-over, 5.9 percent over the previous week's daily average. The week's rise in consumption began on Friday, 10/5 when consumption reached 16.9 Bcf per day. Columbus day saw a spike to 22.0 Bcf and the days that followed saw consumption above 19 Bcf per day.

Power sector consumption fell over the reporting week by 2.9 Bcf per day, an 11.8 percent decline from the previous week. Power burn fell week-over in all eight regions with the Southwest showing the greatest decline where average power burn was lower by 28.6 percent per day. Texas 0.5 Bcf lower per day, declining 13.4 percent; Southeast region also 0.5 Bcf lower, a 6.4 percent decline.

BENTEK also notes slight increases for industrial sector consumption and more nattie went to Mexico in wake of the Reynosa facility explosion in August (click here for the Inputs Monitor report).

Total supply remained essentially equal to the daily averages posted last week. Imports from Canada were mostly offset by a 0.1 Bcf per day decline in dry production.

Storage --

Working natural gas in storage increased to 3,725 Bcf as of Friday, 10/5 implying a net injection of 72 Bcf -- that is 12 Bcf below five-year average net injection and 36 Bcf below last year. Inventories are currently 236 Bcf greater than year-over average and 269 Bcf higher than the five year average.

All three storage regions did manage increases in storage led by the Eastern region which added 42 Bcf, 3.0 Bcf off five-year; Western region added just 3 Bcf and 27 Bcf in the Southern Producing region. All of these additions are still below the five-year average net injection.

Temperatures during the storage report week were 2.6 degrees warmer than the 30-year normal temperature and 2.6 degrees warmer than the same period last year. Temperatures in the lower 48 States averaged 64.7 degrees, compared to 62.1 last year and the 30-year normal of 62.1 degrees. While overall temperatures were warmer than normal, temperatures varied somewhat across Census divisions. The Pacific Census division in the West was particularly warm, averaging 6.7 degrees warmer than the 30-year normal. Southern regions were one degree cooler than the 30-year normal.

As of now...

Near contract natural gas trending apologetically lower after pressing the $3.62 mark earlier today -- slightly softer as of now at $3.58, moving sideways (1:30 CT).



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