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Natural Gas Productive Capacity 2001
U.S. Natural Gas Markets: Recent Trends and Prospects for the Future
Impact of Interruptible Natural Gas Service
A Snapshot of California
Natural Gas Market: Status and Outlook
Natural Gas Storage in the United States in 2001: A Current Assessment and Near-Term Outlook
Residential Natural Gas Price Brochure
Status of Natural Gas Pipeline System Capacity
Previous Issues of Natural Gas Weekly Update
Natural Gas Homepage

Overview:   Monday, June 25, 2001

The industry stock build that began in April has continued into June as the latest weekly estimate indicates that more than 100 Bcf was again added to working gas storage levels. At the same time that natural gas stocks have been increasing, prices have been generally trending down. Prices at many major spot markets moved down most days last week and ended the week between 20 and 30 cents per MMBtu below Tuesday’s prices. On the NYMEX futures market, the near-month (July) contract also ended the week down 25 cents from Tuesday’s high of $3.981. Much of the country continued to enjoy moderate temperatures during last week, which saw the first day of summer  (June 21) prices (See Temperature Map) (See Deviation from Normal Temperatures Map).

 

NYMEX Natural Gas Futures Near Month Contract Settlement Price, Henry Hub Spot Price, and West Texas Intermediate Crude Oil Price

 

Prices: 

A softening of demand attributable to last week’s relatively moderate temperatures and a forecast for a continuation of this weather pattern have contributed to lower prices at most markets. After remaining generally unchanged at the beginning of the week, prices moved up 5 to 10 cents on Tuesday before declining steadily following the release of the stock build estimate on Wednesday.  Some of the lowest prices last week in the industry press were in the Rocky Mountains at the Opal Hub in Wyoming, which dropped 80 cents ($3.00 to $2.20). In California, a high-linepack operational flow order on the SoCal system saw prices drop to $3.88 per MMBtu. from Thursday’s price of $6.54. Prices at the Canadian border also trended down last week. At the Sumas border crossing into Washington State the price moved down $0.58 to $3.17 per MMBtu, and at the Iroquois crossing point in New York it declined $0.30 to $3.88 per MMBtu.

 

At the NYMEX, the near-month July contract for delivery at the Henry Hub trended down most days to end the week at $3.742. The futures contracts covering the remaining months of the storage refill season all ended trading on Friday well below $4.00 with August at $3.802, September at $3.845, and October at $3.898. The July contract will close on Wednesday June 27, and barring any unforeseen events, it will end trading below last year’s final July contract price of $4.369.

   

Spot Prices ($ per MMBTU)-Selected Trading Centers

Mon. 6/18

Tues. 6/19

Wed. 6/20

Thur. 6/21

Fri.   6/22

Henry Hub

3.90

3.94

3.82

3.69

3.69

New York citygates

4.41

4.52

4.25

4.10

4.07

Chicago citygates

3.88

3.95

3.81

3.69

3.68

Northern CA PG&E

4.32

4.07

4.13

4.48

3.76

Southern CA (SOCAL)

8.25

7.34

6.89

6.54

3.88

Futures (Daily Settlement, $MMBTU)

 

 

 

 

 

July Delivery

3.939

3.981

3.734

3.747

3.742

August Delivery

4.024

4.060

3.809

3.810

3.802

Source: Financial Time Energy, Gas Daily

 

 

Storage:

Once again, storage injections set a record as the American Gas Association (AGA) reported that an estimated 106 Bcf was added to U.S. working gas inventories during the week ended Friday, June 15.  Records were set in 7 of the 12 weeks of this refill season and near records in 2 other weeks.  With these injections, EIA-estimated stock levels are above the 6-year (1995-2000) average for the first time since March 2000 in the United States as a whole and the Producing region–and, for the first time since December 1999, in the East region (See Storage Figure).  Only the West region continues to fall below the 6-year average, but by less than 3 percent.  Injections of 30 Bcf in the Producing region were also a new record for this week in the refill season, while the 14 Bcf injected into West region facilities was the second highest for this week. 

 

All Volumes in BCF

Current Stocks (Fri,6/15)

Estimated 6-Year (1995-2000) Average

Percent Difference from 6 Year Average

Net Change from Last Week

One-Week Prior Stocks (Fri,6/8)

East Region

945

939

0.6%

62

883

West Region

258

265

-2.5%

14

244

Producing Region

519

504

2.9%

30

489

Total Lower 48

1,722

1,708

0.8%

106

1,616

Note:  net change data are estimates published by AGA on Wednesday of each week.  All stock-level Figures are EIA estimates based on EIA monthly survey data and weekly AGA net-change estimates.  Column sums may differ from Totals because of independent rounding. 

 

Other Market Trends: 

The latest Bureau of Labor Statistics’s (BLS) consumer price index (CPI) for May 2001 reports that the seasonally adjusted price of natural gas delivered to residential users declined by 2 percent nationally between April and May. This was the fourth consecutive month of decline in the CPI for residential natural gas consumers.  Compared with last year, natural gas prices were 43 percent higher than in May 2000.

 

Summary: 

The robust stock rebuild continued into the second week of June and spot prices trended down last week to well below $4.00 at several major market locations.  The NYMEX near-month contract also moved down most days last week. The BLS reported that for the fourth consecutive month, the price of natural gas to residential consumers declined in May.       

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