for week ending August 26, 2001 | Release date: August 27, 2001 | Previous weeks
With the
return of above-average storage refill estimates for the third week of August
and relatively widespread normal temperatures, prices moved down at most major
markets last week. (See Temperature Map) (See Deviation from Normal
Temperatures Map). At the Henry Hub, the spot market price ended the
week down 46 cents per MMBtu at $2.77. On the futures market, the near-month
(September) NYMEX contract ended trading on Friday at $2.706 per MMBtu—off
close to $0.60 from the previous Friday. The spot price for West Texas
Intermediate (WTI) crude oil remained at or above $27.20 per barrel each day
last week and ended the week at $28.30 or $4.88 per MMBtu.
Prices:
Spot prices at most major market
locations began the week down from the previous Friday, then trended up
slightly at mid-week. However, following the release of the American Gas
Association (AGA) weekly storage estimate on Wednesday for the previous week,
prices moved down between 25 and 35 cents per MMBtu at key regional markets.
Prices fell further in the Rockies, with most trading points there down a few
cents either side of a half dollar. Spot gas at the Henry Hub traded at its
lowest level since July 2 when it traded for $2.93 per MMBtu. Prices at other
major markets all were below $3.00 at the end of the week. Some examples of
these were: Katy in East Texas at $2.78
per MMBtu, Waha in West Texas at $2.71, and Midcontinent in Oklahoma at
$2.65. The lowest prices reported were
found in the Rockies where prices were mostly less than $2.20 per MMBtu.
At the NYMEX, the price of the
September futures contract for delivery at the Henry Hub dropped by almost
$0.60 per MMBtu during the week to settle on Friday at $2.706. The September
contract will close on Wednesday, August 29, and, barring any unforeseen
events, will expire well below last year's final price for the September
contract ($4.618 per MMBtu). On Friday,
the contracts for the period October 2001 to March 2002 settled in a range
between $2.736 and $3.450 per MMBtu. January, historically one of the year's
largest natural gas demand months, recorded the highest settlement price while
March had a market price of $3.325. However, April, the first month of next
year's refill season, was still trading in the $3.20's per MMBtu, indicating
that the long-term market price is still above traditional levels.
Spot Prices ($ per MMBTU)-Selected
Trading Centers |
Mon. 8/20 |
Tues. 8/21 |
Wed. 8/22 |
Thur. 8/23 |
Fri. 8/24 |
Henry Hub |
3.16 |
3.17 |
3.19 |
2.86 |
2.77 |
New York citygates |
3.45 |
3.50 |
3.50 |
3.12 |
3.00 |
Chicago citygates |
3.13 |
3.13 |
3.17 |
2.85 |
2.75 |
Northern CA PG&E |
3.20 |
3.26 |
3.30 |
3.02 |
2.83 |
Southern CA (SOCAL) |
3.20 |
3.30 |
3.39 |
3.12 |
2.95 |
Futures (Daily
Settlement, $MMBTU) |
|
|
|
|
|
September Delivery |
3.187 |
3.166 |
2.848 |
2.811 |
2.706 |
October Delivery |
3.216 |
3.191 |
2.876 |
2.828 |
2.736 |
Source: Financial Times
Energy, Gas Daily |
|
Storage:
Storage stocks increased by 86 Bcf during the week
ended Friday, August 17, according to AGA estimates. Net injections were the
highest since 1996 and were over 35 percent higher than the average for this
report week in the previous 6 years (See
Storage Figure). In addition, AGA
revised its storage estimate for the week ended August 10 from 3 Bcf to 50 Bcf,
increasing estimated net injections in the East Region by 47 Bcf. Despite the more robust injection estimate
for the week ended August 10, 50 Bcf remains the lowest injection estimate for
the report week since 1994. Including
this week's estimate and the revision to last week's estimate, stocks are 7 percent
greater than the average for the past 6 years as storage levels in all three
regions remain well ahead of historical levels.
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Summary:
The resumption of robust
additions to storage and the lack of any current or forecasted weather-related
increases in demand helped lower prices in all markets last week. The NYMEX contract for September delivery is
on track to close this Wednesday at well over a dollar below last year's
September contract.