Weekly Natural Gas Report - Week Ended 9/26/12

September 28, 2012 04:58 AM

The NYMEX October 2012 natural gas contract has expired but rallied strongly week-over-week up 9.4% from $2.762 last week to $3.023. November contract now in the near-month position climbed 27 cents over the week from $2.762 to $3.215 MMBtu.

Henry Hub day-ahead price in general steadily increased over the week up 8.1% to $2.92. Overall increases reported at most downstream locations.


Sustained demand for air conditioning drove demand for natural gas higher over the week. Los Angeles temperatures in the mid-nineties pressed the Southern California Border price 7.7% higher ending the reporting week at $3.21. Algonquin Gas Transmission completed pipeline maintenance pushing East Coast Prices lower - spot prices started the reporting week at $3.72 before shedding 66 cents, finishing the week with a rally to $3.18.


Natural gas consumption increased 2.6% over the week led by consumption in the residential/commercial sector which was up 11.7%. Industrial consumption up 1.4%; Power generation used 1% less nattie but still exceeded year-over consumption by 13.6%.


Total supply is up just 0.3% on the week reflecting unchanged dry gas production week-over-week. Estimates have weekly dry gas production averaging 64.3 Bcf per day - 1.2% higher year-over-year. Canadian imports rose 4.6% - 1.9% above year-ago volumes. Liquefied natural gas (LNG) sendout dropped 13.5% over the week; sendout volumes languish at 57.4% below year-ago levels.


Working natural gas in storage increased to 3,576 Bcf representing an implied net injection of 80 Bcf over previous week. The week's injection was 4 Bcf above the 5-year average and 24 Bcf below last year. Total inventories are currently at 296 Bcf - 9.0% greater than last year at this time and 282 Bcf, 8.6% greater than the 5-year average.

All three storage regions posted increases this week. Inventories in the East increased by 46 Bcf; West up 5 Bcf; Producing region increased by 15 Bcf in salt cavern facilities and 14 Bcf in nonsalt cavern facilities.

Temperatures during the storage report week were 0.9 degrees cooler than the 30-year normal temperature and 2.0 degrees warmer than the same period last year. Temperatures in the lower 48 States averaged 66.0 degrees, compared to 64.0 last year and the 30-year normal of 66.9 degrees. While overall temperatures were about a degree cooler than normal, temperatures varied somewhat across Census divisions. The Pacific Census division in the West was particularly warm, averaging 5.0 degrees warmer than the 30-year normal. In the Midwest, temperatures in the East North Central and West North Central Census divisions were cool, averaging 4.1 and 3.7 degrees cooler, respectively, than the 30-year normal.



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