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Natural Gas Weekly Update

for week ending April 10, 2013  |  Release Date:  April 11, 2013  |  Next Release: April 18, 2013

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JUMP TO: In The News | Overview | Prices/Demand/Supply | Storage

In the News:

Net storage withdrawals reach record levels during a cold March 2013

Net lower 48 working natural gas storage withdrawals for the four full weeks of March 2013 (weeks 9 through 12 of the calendar year) averaged 99.0 billion cubic feet (Bcf). This was the highest average weekly net withdrawal recorded during this four-week period since the Weekly Natural Gas Storage Report began recording inventory levels in 2002. This reflects net withdrawals that are more than three times greater than the five-year (2008-2012) average net weekly withdrawal of 27.8 Bcf. Additionally, net withdrawals were more than 100 Bcf greater than those recorded over the same period in 2012, which had an average weekly net injection of 9.8 Bcf during a period of warmer-than-normal weather.

Conversely, in 2013, the average weekly withdrawals for the four full weeks of March took place during a period of prolonged winter weather. In 2013, gas-weighted heating degree days (HDDs) for weeks 9 through 12 averaged 167.8, compared to the 91.0 HDDs recorded during these four weeks in 2012. Average weekly HDDs for the four weeks of March in 2013 were also greater than the weekly five-year average HDD of 135.3 for the same time period.

The seasonally cold temperatures during March 2013 not only occurred alongside record withdrawals, but also led to substantial upward revisions to projected residential, commercial, and industrial natural gas consumption in March for EIA’s Short-Term Energy Outlook. In addition, they also likely played a role in the rising natural gas prices that were recorded last month.

Overview:

(For the Week Ending Wednesday, April 10, 2013)

  • Both spot and futures prices increased during the report week (Wednesday, April 3 to Wednesday, April 10). The Henry Hub spot price increased from $4.00 per million British thermal unit (MMBtu) to $4.07 per MMBtu.
  • Mirroring movements in the spot price, the New York Mercantile Exchange (Nymex) near-month (May 2013) futures price increased from $3.900 per MMBtu last Wednesday to $4.085 per MMBtu yesterday.
  • Working natural gas in storage declined to 1,673 Bcf as of Friday, April 5, according to the U.S. Energy Information Administration's (EIA) Weekly Natural Gas Storage Report (WNGSR). An implied storage withdrawal of 14 Bcf for the week moved storage levels 804 Bcf below year-ago levels, and 66 Bcf below the 5-year average.
  • The natural gas rotary rig count was 375 as of Friday, April 5, according to data reported by Baker Hughes Incorporated. This represents a decline of 14 from the previous week, and natural gas rigs are at their lowest level since 1999. Oil rigs, on the other hand, increased by 3 to 1,357.

more summary data

Prices:

Natural gas prices increased at most market locations across the country, with more pronounced weather-driven increases in the middle of the country. A large snowstorm hit much of the Rocky Mountain, Midcontinent, and Midwest regions near the end of the report week, which drove up natural gas prices in these regions. Prices at most points in the Rockies increased more than 20 cents per MMBtu; for example, prices at the Opal trading point in Wyoming (one of the most widely traded points in the region) rose 21 cents per MMBtu on the week.

Meanwhile, on the East Coast, temperatures were unseasonably warm. Prices increased slightly in most East Coast and Gulf of Mexico trading locations, with the Henry Hub spot price increasing 7 cents to end the report week at $4.07 per MMBtu. The Henry Hub price ended Monday at $4.18 per MMbtu, its highest level since September 2011, before falling back at the end of the report week. Prices in the Northeast were the exception to the general price increases across the rest of the country; temperatures warmed this report week following a week of unseasonably cold weather in the beginning of April. At the Algonquin Citygate, which serves Boston consumers, prices fell 36 cents to end the week at $4.94 per MMBtu. Similarly, at Transcontinental Pipeline’s Zone 6 point for delivery into New York City, prices fell 26 cents to end the week at $4.84 per MMBtu.

Both supply and consumption declined during the week, according to estimates from Bentek Energy. Dry Production fell by 0.3 percent, but remains 1.6 greater than year-ago levels. Overall Canadian imports declined by 5.7 percent and LNG imports remained at minimal levels. Domestic consumption fell by 10.6 percent, led by weather-related declines in residential and commercial consumption. Consumption of natural gas for power generation rose slightly, but was 19.6 percent less than last year’s unusually high April levels. Overall, this year natural gas power generation has remained below 2012 levels, and coal has regained some of the market share it lost last year when natural gas prices hit historically low levels in the spring.

At the Nymex, the price of the near-month (May 2013) futures contract rose from $3.900 per MMBtu last Wednesday to $4.085 per MMBtu yesterday. Similarly, the 12-month strip (the average of the 12 contracts between May 2013 and April 2014) increased from $4.106 per MMBtu to $4.239 per MMBtu.

more price data

Storage

Working natural gas in storage decreased to 1,673 Bcf as of Friday, April 5, according to EIA's WNGSR. This represents an implied net withdrawal of 14 Bcf from the previous week. Both the 5-year average and year-ago stock changes for the week were implied net injections of 15 Bcf and 11 Bcf, respectively. Inventories are currently 804 Bcf (32.5 percent) less than last year at this time and 66 Bcf (3.8 percent) below the 5-year average of 1,739 Bcf.

Two of the three storage regions posted declines this week. Inventories in the East and Producing regions decreased by 16 Bcf (the 5-year average net withdrawal is zero) and 5 Bcf (compared with the 5-year average net injection of 12 Bcf), respectively, while the West region posted an increase of 7 Bcf (compared to the 5-year average net injection of 2 Bcf). In the Producing region, working natural gas inventories increased 2 Bcf (1.2 percent) in salt cavern facilities and decreased 7 Bcf (1.3 percent) in nonsalt cavern facilities.

Temperatures during the storage report week were 1.3 degrees cooler than the 30-year normal temperature and 7.4 degrees cooler than the same period last year. Temperatures in the Lower 48 states averaged 47.6 degrees, compared to 55.0 degrees last year and the 30-year normal of 48.9 degrees. While overall temperatures were about a degree cooler than normal, temperatures varied somewhat across Census divisions. The East South Central Census division in the South and the East North Central Census division in the Midwest were relatively cool, averaging 5.0 and 4.7 degrees cooler, respectively, than the 30-year normal. In the West, the Mountain Census division was relatively warm, averaging 6.0 degrees warmer than the 30-year normal. Heating degree-days nationwide were 7.7 percent above normal and 53.7 percent above last year.

more storage data

See also:



Natural Gas Spot Prices
Spot Prices ($/MMBtu)
Thu,
04-Apr
Fri,
05-Apr
Mon,
08-Apr
Tue,
09-Apr
Wed,
10-Apr
Henry Hub
3.94
3.98
4.18
4.08
4.07
New York
4.70
4.39
4.49
4.44
4.84
Chicago
4.06
4.04
4.26
4.22
4.25
Cal. Comp. Avg,*
3.85
3.88
4.12
4.04
4.08
Futures ($/MMBtu)
May Contract
3.947
4.125
4.082
4.017
4.085
June Contract
3.990
4.160
4.118
4.057
4.127
*Avg. of NGI's reported prices for: Malin, PG&E citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index
Natural Gas Futures Prices


U.S. Natural Gas Supply - Gas Week: (4/3/13 - 4/10/13)
Percent change for week compared with:
 
last year
last week
Gross Production
1.66%
-0.32%
Dry Production
1.65%
-0.32%
Canadian Imports
-8.50%
-5.67%
      West (Net)
-9.06%
-6.30%
      MidWest (Net)
6.82%
16.23%
      Northeast (Net)
-70.74%
-75.26%
LNG Imports
-81.40%
-42.05%
Total Supply
0.57%
-0.75%
Source: BENTEK Energy LLC
U.S. Consumption - Gas Week: (4/3/13 - 4/10/13)
Percent change for week compared with:
 
last year
last week
U.S. Consumption
-5.98%
-10.63%
Power
-19.56%
0.74%
Industrial
-0.80%
-3.50%
Residential/Commercial
2.98%
-22.12%
Total Demand
-4.99%
-10.32%
Source: BENTEK Energy LLC
Natural Gas Supply


Rigs
Fri, April 05, 2013
Change from
 
last week
last year
Oil Rigs
1,357
0.22%
2.11%
Natural Gas Rigs
375
-3.60%
-42.04%
Miscellaneous
6
20.00%
100.00%
Rig Numbers by Type
Fri, April 05, 2013
Change from
 
last week
last year
Vertical
451
1.81%
-22.64%
Horizontal
1,084
-1.36%
-6.95%
Directional
203
-1.46%
-12.12%
Source: Baker Hughes Inc.


Working Gas in Underground Storage
Stocks
billion cubic feet (bcf)
Region
4/5/13
3/29/13
change
East
646
662
-16
West
337
330
7
Producing
690
695
-5
Total
1,673
1,687
-14
Source: U.S. Energy Information Administration
Working Gas in Underground Storage
Historical Comparisons
Year ago
(4/5/12)
5-year average
(2008-2012)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,089
-40.7
738
-12.5
West
352
-4.3
265
27.2
Producing
1,036
-33.4
736
-6.3
Total
2,477
-32.5
1,739
-3.8
Source: U.S. Energy Information Administration


Temperature -- Heating & Cooling Degree Days (week ending Apr 04)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
169
3
7
0
0
0
Middle Atlantic
170
21
37
0
0
0
E N Central
188
33
83
0
0
0
W N Central
174
24
117
0
-1
-10
South Atlantic
105
24
61
11
-2
-14
E S Central
105
30
95
0
-5
-22
W S Central
47
7
44
17
2
-34
Mountain
95
-40
2
7
2
2
Pacific
48
-31
-36
0
-2
0
United States
126
9
44
4
0
-8
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Apr 04, 2013

Mean Temperature (F) 7-Day Mean ending Apr 04, 2013

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Apr 04, 2013

Mean Temperature Anomaly (F) 7-Day Mean ending Apr 04, 2013

Source: NOAA/National Weather Service