for week ending September 3, 2001 | Release date: September 4, 2001 | Previous weeks
Prices in most major markets
continued generally downward last week, spurred by relatively mild temperatures
throughout much of the country and more than adequate supplies as indicated by
reports of another strong storage refill rate for the prior week. (See Temperature Map) (See
Deviation from Normal Temperatures Map) The spot market price at
the Henry Hub in Louisiana ended the week down 62 cents at $2.15 per MMBtu. On the NYMEX futures market, the contract for
September delivery at the Henry Hub expired on Wednesday at $2.295 per MMBtu,
compared with almost $4.62 a year ago. The contract for delivery in October ended the week at $2.38. The spot price for West Texas Intermediate
(WTI) crude oil ended the week down at $27.25 per barrel ($4.70 per MMBtu), a
decline of $1.05 per barrel from the prior week.
Prices:
Spot
prices at major market locations such as Southern California (SoCal), Northern
California (PG&E), New York, Chicago and the Henry Hub gradually declined
each day throughout the week in a range of about 3 to 16 cents per million Btu
through Wednesday, August 29. However,
on Thursday prices held fairly steady in a range of 2 cents per million Btu as concerns
over the possibility of a new tropical system slowed the downward momentum of
prices. However, the system quickly
dissipated, and prices resumed their downward path on Friday. Spot prices fell below the $2.50 mark at
most of the major market locations with the notable exception of Florida, which traded at $2.79. Spot prices were below $2.00 at several upstream markets
including Texas, Oklahoma, New Mexico and the Rockies. At the Henry Hub, spot prices fell to $2.15,
the lowest level since January 4, 2000, when the spot price was just under
$2.15 per million Btu. With moderate
temperatures and sufficient supplies, prices are not expected to return to
higher levels soon.
At
the NYMEX, the price of the September futures contract for delivery at the
Henry Hub expired on Wednesday, August 29, at $2.295 per million Btu after
dropping a little over 50 cents from the previous Friday price. This final settlement price represents the
lowest final price for next month delivery since January 13, 2000, when the
February contract settled at $2.32. It is also the lowest settlement price for
the September contract in over 2 years. The futures contract for October delivery closed on Friday, August 24,
at $2.736 per MMBtu. Like the spot
price at the Henry Hub, its price declined gradually throughout the week
through Wednesday, and held fairly steady on Thursday before declining again on
Friday. Although the market exhibited
some backwardation through October with prices for future delivery below
current cash prices for most of the week, the prices for delivery in January
and February exceed $3.00 per million Btu. This should provide sufficient incentive for the market to continue its
robust injections into storage.
Spot Prices ($ per MMBTU)-Selected
Trading Centers |
Mon. 8/27 |
Tues. 8/28 |
Wed. 8/29 |
Thur. 8/30 |
Fri. 8/31 |
Henry Hub |
2.59 |
2.56 |
2.45 |
2.46 |
2.15 |
New York citygates |
2.90 |
2.84 |
2.77 |
2.75 |
2.35 |
Chicago citygates |
2.59 |
2.54 |
2.44 |
2.46 |
2.16 |
Northern CA PG&E |
2.76 |
2.69 |
2.55 |
2.55 |
2.12 |
Southern CA (SOCAL) |
2.89 |
2.75 |
2.60 |
2.58 |
2.16 |
Futures (Daily
Settlement, $MMBTU) |
|
|
|
|
|
September Delivery |
2.544 |
2.415 |
2.295 |
2.395 |
2.380 |
October Delivery |
2.582 |
2.443 |
2.393 |
2.720 |
2.710 |
Source: Financial Times
Energy, Gas Daily |
|
Storage:
A net total of 76 Bcf was injected into storage during the
week ended August 24, according to the American Gas Association (AGA). Net injections for the total United States
and the West region were the second highest for this week in the 8-year span of
AGA estimates. Net injections of 55 Bcf
in the East region were 10 percent greater than the 6-year average for the week
(See Storage Figure). Net injections in the Producing region were
slightly below the 6-year average of AGA estimates for the week, marking only
the second time this refill season that this region's weekly net injections
have not exceeded the average. With
still another week of net injections to account for in August, cumulative net
injections through the 24th for the total United States of 246 Bcf are
very close to eclipsing EIA's 6-year average of 261 Bcf for the entire month. Cumulative net injections thus far in the
West region are over three times the 6-year average for the month (39 Bcf vs. 12
Bcf).
.
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Summary:
Prices
in both the spot and the NYMEX futures market continued to decline throughout
most of the week. A strong supply
situation as evidenced by a strong injection report and moderate temperatures
in much of the country combined to drive down prices. The NYMEX futures contract for delivery in September closed over
$1.50, or almost 40 percent, lower than its final settlement price last year.