for week ending April 24, 2002 | Release date: April 25, 2002 | Previous weeks
The spot price of natural
gas moved up most days since last Wednesday, April 17, as prices at the Henry
Hub reached $3.63 per MMBtu on Tuesday — the highest price since April 3, 2002.
The recent period of both warmer-than-normal weather east of the Rockies and
colder-than-normal temperatures in the West resulted in above normal
weather-related demand. The upward price trend reversed itself at all major
market locations yesterday (4/24/02), as prices declined generally between 10
to 15 cents per MMBtu with prices at the Henry Hub declining 10 cents to $3.53.
On the NYMEX, the settlement price for May delivery, which had increased almost
every day since April 16, peaked on Tuesday, then declined sharply in
yesterday's trading-moving down over 17 cents-to settle at $3.419 per MMBtu.
Net additions to storage were estimated to have been 69 Bcf in the third week
of April, well above the previous 5-year average. The spot price for West Texas
(WTI) crude oil increased to $26.28 per barrel, or $4.47 per MMBtu.
Prices:
Spot
prices at all major natural gas market locations, which are trading at higher
levels than those prevailing at the end of last week, declined yesterday
(4/24/02), reversing the recent increases. Prices declined between 10 and 15
cents per MMBtu at a majority of natural gas markets. At the Henry Hub, prices
moved down 10 cents to $3.53, while at citygate locations in Chicago and New
York City, prices traded on Wednesday at $3.55 and $3.85 per MMBtu,
respectively. Temperatures have returned to a more seasonal pattern in much of
the country this week, reducing weather-related demand from levels of last
week. Trading points in the Rocky Mountain region reported declines on
Wednesday of 20 to 30 cents per MMBtu at several market locations, where
reported prices ranged between $2.35 and $2.63 per MMBtu. Demand for gas in
that region and in northern California continued to be soft as PG&E
projected that linepack would stay at its present high level.
On
the NYMEX, the near-month contract for May delivery, which reached a recent
high of $3.596 per MMBtu on April 22, settled down over 17 cents at $3.419 per
MMBtu on Wednesday, April 24. The May contract closes tomorrow (4/26/02) and
barring any unforeseen event should end trading well below last year's final
price for the May contract of $4.981 per MMBtu. In addition, prices for all
NYMEX contracts through the remainder of the year declined to below $4.00 per
MMBtu as yesterday's (4/24/02) settlement prices ranged from May's $3.419 to
December's $3.935 per MMBtu.
Spot Prices ($ per MMBtu) |
Thur. |
Fri. |
Mon. |
Tues. |
Wed. |
18-Apr |
19-Apr |
22-Apr |
23-Apr |
24-Apr |
|
Henry Hub |
3.51 |
3.40 |
3.58 |
3.63 |
3.53 |
New York |
3.81 |
3.68 |
3.97 |
3.97 |
3.85 |
Chicago |
3.50 |
3.41 |
3.59 |
3.64 |
3.55 |
Cal. Comp. Avg,* |
3.31 |
3.01 |
3.32 |
3.31 |
3.21 |
Futures ($/MMBtu) |
|
|
|
|
|
May delivery |
3.485 |
3.527 |
3.596 |
3.591 |
3.419 |
June delivery |
3.523 |
3.562 |
3.616 |
3.615 |
3.431 |
*Avg. of NGI's reported
avg. prices for: Malin, PG&E
citygate, |
|||||
and Southern California
Border Avg. |
|||||
Source: NGI's Daily Gas
Price Index (http://intelligencepress.com). |
Storage:
Net injections for the week ended Friday, April 19, were
69 Bcf according to American Gas Association (AGA) estimates. While this volume
of net injections is 60 percent greater than the 43 Bcf that was added to
inventory during the same week last year, it is triple the 5-year average of 23
Bcf. The latest EIA estimate for
total working gas is 1,655 Bcf, more than 40 percent higher than the 5-year
(1997-2001) average for this week. Considering last week's significantly
warmer-than-normal temperatures in some regions of the country, (See Temperature Map) (See Deviation Map) which
was reported to have placed a strong demand on power generators to meet the increased air
conditioning load, last week's stock build exceeded the level anticipated by
some industry observers. (See Storage Figure)
All Volumes
in Bcf |
Current
Stocks (Fri,4/19) |
Estimated
Prior 5-Year (1997-2001) Average |
Percent
Difference from 5 Year Average |
Net Change
from Last Week |
One-Week Prior
Stocks (Fri, 4/12)* |
East Region |
812 |
600 |
35% |
37 |
775 |
West Region |
258 |
181 |
42% |
8 |
250 |
Producing
Region |
585 |
397 |
47% |
24 |
561 |
Total Lower
48 |
1,655 |
1,178 |
41% |
69 |
1,586 |
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. |
Gas drilling
activity:
The number of rotary rigs drilling gas prospects rose for the second week in a
row, to 613, according to the latest Baker Hughes rig count released Friday,
April 19. This is the first time in
nearly a year that the natural gas rig count has recorded consecutive weekly
increases. Since reaching its all-time
high of 1,068 rigs running for the week ended July 13, 2001, the rig count has
fallen quite consistently, recording only 4 weekly increases in the 36 weeks
through April 5. As of that date, the
rig count had dropped to 591–its lowest level since October 15, 1999, when it
reached 579. For the month of March
2002, the average number of natural gas rigs was 617, compared with 913 for
March 2001, or a decline of about 33 percent.
EIA
weekly storage data series: The Energy Information Administration (EIA)
will begin releasing weekly estimates of natural gas in underground storage for
the United States and three regions of the United States on May 9, 2002. This new survey ensures that there will be
no lapse in coverage of this important market indicator,
since a similar weekly survey conducted by the American Gas Association (AGA)
will be discontinued with their final release of weekly storage estimates on
May 1, 2002 (with data for April 26). General information on the weekly storage survey, including
weekly release time, a sample of the presentation format, EIA's policy on using
automated retrieval programs (or robots) against the EIA site, and related
information products is available at http://tonto.eia.doe.gov/oog/info/ngs/information.html.
A paper discussing the Form EIA-912, "Weekly Underground Natural Gas
Survey" and the estimation methods used will be available through this Web
site on May 1, 2002. A second paper, comparing the AGA and EIA surveys and
methods, will be available through this Web site on May 9, 2002.
Summary:
Spot prices declined at all
markets on Wednesday (4/24/02) reversing an almost 10-day period of price
increases. The NYMEX contract for May delivery closes tomorrow (4/26/02), and
following yesterday's sharp decline of over 17 cents per MMBtu, it should end
trading well below last year's price ($4.981). The latest estimate of weekly
net additions to storage in the third week of April was triple the 5-year
average.