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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, August 27, 2001

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.  

 

All Volumes in BCF

Current Stocks (Fri,8/17)

Estimated 6-Year (1995-2000) Average

Percent Difference from 6 Year Average

Net Change from Last Week

One-Week Prior Stocks (Fri,8/10)

East Region

1,435

1,401

2.4%

57

1,378

West Region

346

318

8.8%

6

340

Producing Region

697

595

17.1%

23

674

Total Lower 48

2,478

2,314

7.1%

86

2,392

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. *Revised to incorporate EIA survey data for April 2001.

 

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.

 


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