for week ending November 6, 2002 | Release date: November 7, 2002 | Previous weeks
Since Wednesday, October 30,
natural gas spot prices have decreased at most locations in the Lower 48
States, falling between 29 and 77 cents per MMBtu. For the week (Wednesday-Wednesday), prices at the Henry Hub
decreased 40 cents or roughly 9 percent to $3.93 per MMBtu. The price of the NYMEX futures contract for
December delivery at the Henry Hub has decreased nearly 54 cents since last
Wednesday to settle at $3.854 per MMBtu
yesterday (November 6). Natural gas in
storage decreased to 3,145 Bcf, but exceeds the 5-year average by almost 5
percent. The spot price for West Texas
Intermediate (WTI) crude oil declined $1.13 per barrel or about 4 percent since
last Wednesday to trade at $25.72 per barrel or $4.434 per MMBtu.
Spot prices generally
decreased over the past 7 days, keyed by significant price drops last Thursday,
Friday, and Monday as moderating temperatures mitigated demand for natural gas. The steepest declines since
last Wednesday occurred at selected points in the Midcontinent and Northeast
regions as prices fell between 60 and 77 cents per MMBtu. Prices were at
relatively high levels on Wednesday, October 30, driven principally by an early
blast of cold weather across most parts of the country. However, prices tumbled on Friday, November 1, with declines of 25 to 44 cents
per MMBtu. Contributing factors to the
sharp drop in price likely included the Weekly Natural Gas Storage Report
released on Thursday, October 31, which reported larger-than-expected additions
to storage, in addition to warmer temperatures and lessened demand over the
weekend. The overall pattern of
declining prices was halted on Tuesday, November 5 and Wednesday, November 6
with slight gains of less than nickel at most markets.
At the NYMEX, the price of the futures contract for
December delivery at the Henry Hub has decreased nearly 54 cents since
Wednesday, October 30, to settle at $3.854 per MMBtu on Wednesday, November
6. Prices of the futures contracts for
delivery during the remaining months in 2002 and through the heating season
have decreased by roughly 32 to 49 cents per MMBtu since October 30, with the
larger increases occurring for the more immediate months' contracts. After falling more than 12 cents below the
Henry Hub spot price last Thursday, prices of the contracts for the winter
months of January and February climbed above the current Henry Hub spot price
as the week progressed. This price
differential could provide some incentive for additions of natural gas to
storage.
Spot Prices ($ per MMBtu) |
Thur. |
Fri. |
Mon. |
Tues. |
Wed. |
31-Oct |
1-Nov |
4-Nov |
5-Nov |
6-Nov |
|
Henry Hub |
4.38 |
4.06 |
3.94 |
3.90 |
3.93 |
New York |
4.98 |
4.52 |
4.34 |
4.42 |
4.44 |
Chicago |
4.41 |
4.08 |
3.91 |
3.92 |
3.92 |
Cal. Comp. Avg,* |
4.33 |
4.07 |
3.93 |
3.88 |
3.93 |
Futures ($/MMBtu) |
|
|
|
|
|
Dec delivery |
4.156 |
4.06 |
3.863 |
3.883 |
3.854 |
Jan delivery |
4.256 |
4.165 |
3.983 |
3.993 |
3.971 |
*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:
Working gas in storage was 3,145 Bcf for the week
ended Friday, November 1, 2002, according to the EIA Weekly Natural Gas
Storage Report. This is the first
time since the week ended June 1, 2001, that current stocks have fallen below
the level recorded during the same report week of the previous year. (See
Storage Figure) Nevertheless, natural gas in storage is almost 5 percent greater than
the 5-year average of 3,007 Bcf for the report week. Implied net withdrawals of natural gas from working gas storage
were 27 billion cubic feet (Bcf), which marks the first net withdrawal of the
2002-2003 heating season and only the second time in the past 8 years that a
net withdrawal occurred during the report week. The withdrawals from storage were driven by the early arrival of
cold temperatures across the Lower 48 States. On average, gas-weighted heating degree days were 37 percent above
normal for the week ended November 2, 2002, and 59 percent above the level last
year for the same week. (See Temperature Map)
(See Deviation Map)
All Volumes
in Bcf |
Current
Stocks 11/01/02 |
Estimated
Prior 5-Year (1997-2001) Average |
Percent
Difference from 5 Year Average |
Implied Net
Change from Last Week |
One-Week
Prior Stocks 10/25/02 |
|
East Region |
1,854 |
1,843 |
0.6% |
-13 |
1,867 |
|
West Region |
411 |
363 |
13.2% |
-5 |
416 |
|
Producing
Region |
880 |
802 |
9.7% |
-9 |
889 |
|
Total Lower
48 |
3,145 |
3,007 |
4.6% |
-27 |
3,172 |
|
Source: Energy Information Administration: Form EIA-912, "Weekly Underground Natural
Gas Storage Report," and the Historical Weekly Storage Estimates
Database. Row and column sums may not
equal totals due to independent rounding. |
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EIA Releases New Report on the U.S. LNG Market: The Energy Information
Administration (EIA) has posted a feature article on its web site on the role
of liquefied natural gas (LNG) in the natural gas industry titled U.S. LNG Markets and Uses. The article examines different aspects of LNG operations, paying particular attention to marine
terminals, peak-shaving storage facilities, and facilities serving niche
markets such as LNG as a vehicular fuel. LNG, which is natural gas that has
been cooled to about minus 260 degrees Fahrenheit for shipment and/or storage
as liquid, is an important source of supply in meeting the peak-day demands of
local utilities, particularly in the Northeast. The report highlights the role
of these LNG storage facilities, as well as proposed expansion plans at
existing U.S. LNG import terminals and proposals for new import facilities.
EIA Issues Information of
Particular Interest to Residential Natural Gas Customers: On Friday, November 1, EIA
posted an information product on its web site titled: Residential Natural Gas Prices: Information for Consumers. This brochure describes how natural gas is supplied to individual
households, and shows the various components that are included in the price a
residential customer pays for natural gas. It touches on natural gas industry restructuring at the State level,
explaining how this on-going process can affect residential consumers and why
they should be interested in it. In
addition, the brochure summarizes EIA's projections for the current heating
season, including the average heating-season price and likely total cost over
the winter for natural gas for the typical residential consumer. The brochure
also suggests ways for consumers to save on their natural gas bills.
Summary:
Spot prices fell during the
week since October 30 with decreases of over 29 cents at most market locations. The futures contract price for December
delivery decreased by 54 cents, settling at $3.854 per MMBtu. As of November 1, working gas storage stocks
were 3,145 Bcf, 7 Bcf below the level
recorded for the same report week last year but nearly 5 percent above the
5-year average.
Natural Gas Summary from the
Short-Term Energy Outlook