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Natural Gas

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Natural Gas Weekly Update Archive

for week ending January 01, 2002  |  Release date:  January 02, 2002   |  Previous weeks

Overview:

Spot prices in the Midwest and the East moved up most days during the holiday period as cold weather blanketed much of the area. .(See Temperature Map) (See Deviation Map) (Temperature map) (Temperature Deviation Map). Prices in Chicago moved close to $3.00 per MMBtu last week, while prices in the New York City area approached $5.00 on the last day of the year. Daytime temperatures early this week in the Northeast remained in the 20s and 30s from Washington, DC to Boston. The National Weather Service is calling for the wintry temperatures to continue through the end of the week in most areas in the eastern two thirds of the country. On the NYMEX, the daily settlement price for the futures contract for February delivery has declined in recent trading as the higher-than-average storage levels continue to be the main contributor to the current strong natural gas supply situation. An estimated 2,992 Bcf remains in storage as of December 21, 2001. The spot price for West Texas Intermediate (WTI) crude oil moved down in last week's trading and ended the year at $19.96 per barrel or $3.44 per MMBtu on Monday.

 

 

Prices:

Spot prices at many major markets in the eastern two thirds of the country reached their highest levels thus far this heating season on December 31. Prices in New York City led the way as expectations for a continuation of this past weekend's low temperatures contributed to an almost $1.25 per MMBtu increase on Monday, with prices approaching $5.00 per MMBtu at Transco Zone 6 for New York delivery. Prices for delivery to other major Northeast metropolitan areas also moved up sharply, gaining $0.48 to $0.72 per MMBtu during Monday's trading to reach a range of around $3.75 to $4.15. Even with these sharp price increases, prices remain well below last year's near record-setting daily prices of late December and early January of over $10.00 per MMBtu at the Henry Hub and citygate prices of $19.00 in Chicago and $39.00 in New York.

The year-on-year comparison of NYMEX futures prices is even wider, as last year's February contract traded for $9.775 per MMBtu on December 29, 2000, compared with this year's level of only $2.570 on December 31, 2001. Furthermore, the futures contract for January delivery closed on December 27, 2001, at $2.555 per MMBtu—almost $7.45 below last year's record level of $9.98.

 

Spot Prices ($ per MMBtu)

Mon. 12/24

Tues. 12/25

Wed. 12/26

Thurs. 12/27

Fri. 12/28

Mon. 12/31

Tues. 1/1

Henry Hub

2.63

2.63

2.95

2.64

2.66

2.75

2.75

New York citygates

3.03

3.03

3.81

3.34

3.69

4.93

4.93

Chicago citygate

2.45

2.45

2.99

2.65

2.66

2.71

2.71

PG&E citygate

2.73

2.73

2.99

2.69

2.49

2.66

2.66

So. Cal. Border Avg.

2.61

2.61

2.85

2.56

2.49

2.60

2.60

Futures ($/MMBtu)

 

 

 

 

 

 

 

January delivery

closed

holiday

2.911

2.555

Expired

Expired

Expired

February delivery

closed

holiday

2.937

2.619

2.774

2.570

holiday

March delivery

closed

holiday

2.917

2.630

2.746

2.560

holiday

Source: NGI's Daily Gas Price Index (http://intelligencepress.com)

 

 

 

Storage:

According to the American Gas Association (AGA), net storage withdrawals were 81 Bcf for the week ended Friday, December 21. The total net withdrawal is just 58 percent of the 6-year (1995-2000) average, and is less than half of the 175 Bcf withdrawn during this week last year. Net withdrawals for both the East and Producing regions for this week were the lowest in the 8-year history of AGA data. As of December 21, natural gas stocks in all regions and the nation as a whole exceeded their respective 6-year averages for this date by 10 percent or more. For the Producing region, the surplus was over 46 percent, while for the entire nation it was nearly 24 percent. With the exception of the West, the surpluses over the 6-year averages have increased for 8 weeks in a row since the week ended Friday, November 2. (See Storage Figure)

 

All Volumes in BCF

Current Stocks (Fri,12/21)

Estimated 6-Year (1995-2000) Average*

Percent Difference from 6 Year Average

Net Change from Last Week

One-Week Prior Stocks (Fri,12/14)

East Region

1,751

1,489

17.6%

-53

1,804

West Region

348

316

10.0%

-12

360

Producing Region

893

610

46.3%

-16

909

Total Lower 48

2,992

2,415

23.9%

-81

3,073

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 revisions to EIA monthly survey data for various months in 1999-2000.

 

Summary:

The winter's first extensive period of cold temperatures, especially in the populous Northeast, has seen prices move up sharply at most citygate markets in the Eastern United States. However, with storage levels that are close to 1 Tcf more than last year at this time, current prices remain well below those seen last year on both the spot and NYMEX futures markets.