for week ending June 26, 2002 | Release date: June 27, 2002 | Previous weeks
Since Wednesday, June 19,
natural gas spot prices increased at most locations, despite declines ranging
between 5 and 14 cents per MMBtu on Wednesday, June 26. For the week, prices at the Henry Hub
increased 19 cents to $3.42 per MMBtu, which is an increase of almost 6
percent. High temperatures and rising
crude oil prices contributed to increased cooling demand for gas, which spurred
the price hikes. The NYMEX futures
contract for July delivery at the Henry Hub expired yesterday (June 26) at
$3.278 per MMBtu, falling over 17 cents in its final day of trading. Natural gas in storage increased to 2,184
Bcf, which exceeds the 5-year average by more 20 than percent. The spot price for West Texas Intermediate
(WTI) crude oil increased $1.10 per barrel or over 4 percent since last
Wednesday, trading at $26.67 per barrel or $4.60 per MMBtu.
Prices:
Spot prices climbed at most market locations in the
Lower 48 States during the past week driven principally by soaring temperatures
across the country. Since Monday, June
24, most locations recorded gains ranging between 10 and 30 cents. However,
moderating temperatures and a cool front moving through the Midwest contributed
to declines on Wednesday, June 26, ranging between 5 and 14 cents at most
market locations. Some Rocky Mountain
locations and Malin, California, had gains of 12 to 27 cents since Monday,
despite overall price declines of 21 to 32 cents since last Wednesday (June
19), which are the only week-to-week net price declines in the country. Price increases for the week were the
largest in southern California, Florida, the Midcontinent, and the Northeast,
where prices increased more than 25 cents at most locations.
At the NYMEX, the settlement
price of the futures contract for July delivery at the Henry Hub fell by almost
4 cents during the week to a final settlement price of $3.278 per MMBtu, owing
to a drop of more than 17 cents in its final day of trading. Prices of the futures contracts for delivery
during each of the other months remaining in 2002 fell roughly 14 cents per
MMBtu on Wednesday, June 26. The
settlement prices of these contracts declined between 3 and 6 cents for the
week, despite the considerable daily variation in price. The price of the futures contract for
August delivery at the Henry Hub settled at $3.353 on Wednesday, almost 8 cents
higher than the price of the expiring July contract, and nearly 7 cents less
than the Henry Hub spot price. The
contract for August delivery begins trading as the new near-month contract
today (Thursday, June 27).
Spot Prices ($ per MMBtu) |
Thur. |
Fri. |
Mon. |
Tues. |
Wed. |
20-Jun |
21-Jun |
24-Jun |
25-Jun |
26-Jun |
|
Henry Hub |
3.29 |
3.17 |
3.33 |
3.49 |
3.42 |
New York |
3.66 |
3.51 |
3.80 |
4.15 |
4.01 |
Chicago |
3.29 |
3.17 |
3.34 |
3.53 |
3.42 |
Cal. Comp. Avg,* |
2.91 |
2.72 |
2.99 |
2.99 |
2.85 |
Futures ($/MMBtu) |
|
|
|
|
|
July delivery |
3.216 |
3.237 |
3.430 |
3.449 |
3.278 |
Aug delivery |
3.276 |
3.294 |
3.480 |
3.495 |
3.353 |
*Avg. of NGI's reported
avg. prices for: Malin, PG&E
citygate, |
|||||
and Southern California
Border Avg. |
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Source: NGI's Daily Gas Price
Index (http://intelligencepress.com). |
Storage:
Natural gas in storage totaled 2,184 Bcf in the
Lower 48 States for the week ended Friday, June 21, 2002, according to EIA's Weekly
Natural Gas Storage Report. This is
over 20 percent above the 5-year average, and almost 24 percent above the level
last year for the same report week (See Storage Figure)
. Moreover, working gas in storage for this time of year is at the highest
level ever recorded in the 9 years of weekly storage data. Similarly, storage levels in each region are
robust relative to historical averages with the East region almost 11 percent
above average; the West region over 23 percent above average; and the Producing
region over 36 percent above average. The implied net change in stocks for the week ended June 21 was 88 Bcf,
or almost 5 percent above the 5-year average for the week. However, implied net injections were nearly
16 percent below last year's net injections of 104 Bcf. This may be attributed at least in part to
somewhat moderate cooling demand for natural gas, as cooling degree days for
the week ended June 22 were almost 8 percent less than last year at this time,
and slightly more than 3 percent below normal. (See
Temperature Map) (See Deviation Map)
All Volumes
in Bcf |
Current
Stocks 6/21/2002 |
Estimated Prior
5-Year (1997-2001) Average |
Percent
Difference from 5 Year Average |
Net Change
from Last Week |
One-Week
Prior Stocks 6/14/2002 |
|
East Region |
1,115 |
1,008 |
11% |
57 |
1,058 |
|
West Region |
314 |
255 |
23% |
11 |
303 |
|
Producing
Region |
755 |
554 |
36% |
20 |
735 |
|
Total Lower
48 |
2,184 |
1,816 |
20% |
88 |
2,096 |
|
Source: Energy Information Administration: Form EIA-912, "Weekly Underground
Natural Gas Storage Report," and the Historical Weekly Storage Estimates
Database. |
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Other Market Trends:
Natural Gas Rig Counts: The number of rigs drilling
for natural gas decreased by 11 to 698 for the week ended Friday, June 21,
according to Baker-Hughes Incorporated. This is the fourth consecutive week that the number of rigs has fallen
from its recent high of 725 recorded on May 24, 2002. The recent declines were
preceded by 7 weeks of increases. Natural gas rigs are over 34 percent below last year at this time when they
numbered a then-record high of 1,063. Rigs drilling for natural gas in the past 6 weeks comprise 84 percent of
total rigs drilling, which is close to a record for the split between gas and
oil rigs. The emphasis on gas prospects
reflects the relative advantage in the average natural gas wellhead prices
compared with the first purchase domestic price for crude oil. The share of rigs drilling for natural gas
has been consistently above 80 percent since early last year.
Summary:
Spot prices climbed at most
market locations during the week since June 19 with increases ranging between
12 and 24 cents. The futures contract
for July delivery expired yesterday, settling at $3.278 per MMbtu. As of June 21, storage stocks were 2,184 Bcf,
a level well above the weekly maximum for the past 5 years. Roughly five of every six rigs drilling in
the United States is drilling for natural gas.