for week ending July 30, 2003 | Release date: July 31, 2003 | Previous weeks
Compared with Wednesday, July 23, natural gas spot
prices were lower at all locations in the Lower 48 States in trading on July
30. For the week (Wednesday-Wednesday),
prices at the Henry Hub decreased 19 cents or about 4 percent to $4.69 per
MMBtu. The price of the NYMEX futures contract for August delivery at the Henry
Hub closed on Tuesday, July 29 at $4.693 per MMBtu, down roughly 18 cents or 4
percent since last Wednesday. The NYMEX
futures contract for September delivery became the near month contract on
Wednesday, July 30, settling at $4.668 per MMBtu (or 18 cents less than last
Wednesday's price.) Natural gas in storage increased to 2,032 Bcf as of Friday, July 25,
which is about 12 percent below the 5-year average. The spot price for West Texas Intermediate (WTI) crude oil
decreased $0.56 per barrel or roughly 4 percent since last Wednesday to trade
yesterday at $30.69 per barrel or $5.29 per MMBtu.
Prices have
fallen at virtually all market locations since last Wednesday, July 23, with
declines of 10 to 34 cents per MMBtu at most locations. Despite rising cooling load in key consuming market areas in Texas and the
West, the continuing high rate of storage refill in recent weeks likely contributed to the price drops. The majority of the declines occurred on
Friday, July 25, as price declines ranged between 14 and 29 cents per MMBtu at
most market locations. Lessened demand
owing to moderating temperatures elsewhere in the Lower 48 States reinforced
the pattern of declining prices. Since Wednesday, July 23, the largest price
decreases principally occurred in the California and Rocky Mountains regions,
falling more than 25 cents per MMBtu. Since July 1, 2003, prices have fallen 7 to 12 percent at most market
locations in the Lower 48 States. Nevertheless, prices remain significantly
higher than last year at this time at all market locations, with prices at the
Henry Hub about 57 percent greater than last year's level.
Spot Prices ($ per MMBtu) |
Thur. |
Fri. |
Mon. |
Tues. |
Wed. |
24-Jul |
25-Jul |
28-Jul |
29-Jul |
30-Jul |
|
Henry Hub |
4.88 |
4.68 |
4.67 |
4.72 |
4.69 |
New York |
5.28 |
5.03 |
5.03 |
5.06 |
5.04 |
Chicago |
4.89 |
4.72 |
4.70 |
4.75 |
4.71 |
Cal. Comp. Avg,* |
4.81 |
4.61 |
4.55 |
4.59 |
4.52 |
Futures ($/MMBtu) |
|
|
|
|
|
Aug delivery |
4.731 |
4.706 |
4.700 |
4.693 |
expired |
Sept delivery |
4.704 |
4.691 |
4.665 |
4.638 |
4.668 |
Oct delivery |
4.744 |
4.729 |
4.695 |
4.671 |
4.693 |
*Avg. of NGI's reported
avg. prices for: Malin, PG&E
citygate, |
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and Southern California
Border Avg. |
|||||
Source: NGI's Daily Gas
Price Index (http://intelligencepress.com). |
At the NYMEX, the price of the futures contract for
August delivery at the Henry Hub fell about 17 cents per MMBtu since Wednesday,
July 23, to close at $4.693 per MMBtu on Tuesday, July 29. This is the lowest
settlement price for the August contract since January 3, 2003. In its first day as the prompt month on
Wednesday, July 30, the September contract gained 3 cents to $4.668 per MMBtu,
or a decline of 18 cents since last Wednesday. The basis differential between the Henry Hub spot price and futures
prices shows a pattern of increase for each successive month from September
2003 through January 2004, which provides incentives to inject natural gas in
storage. Specifically, in trading
yesterday (July 30), the October 2003 contract roughly equaled the Henry Hub
spot price, and the January 2004 contract exceeded the spot price by 61
cents.
Estimated Average Wellhead Prices |
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|
Jan-03 |
Feb-03 |
Mar-03 |
Apr-03 |
May-03 |
Jun-03 |
Price ($ per Mcf) |
4.47 |
5.45 |
6.69 |
4.71 |
4.97 |
5.35 |
Price ($ per MMBtu) |
4.36 |
5.31 |
6.52 |
4.59 |
4.84 |
5.21 |
Note: The price data in this table are a pre-release of the average
wellhead price that will be published in forthcoming issues of the Natural
Gas Monthly. Prices were converted
from $ per Mcf to $ per MMBtu using an average heat content of 1,025 Btu per
cubic foot as published in Table A2 of the Annual Energy Review
2001. |
||||||
Source: Energy Information Administration, Office
of Oil and Gas. |
Working gas in storage was 2,032 Bcf as of Friday,
July 25, 2003, climbing past the 2 trillion cubic foot mark for the first time
since January 17, 2003, according to the EIA Weekly Natural Gas Storage
Report (See
Storage Figure). This
is roughly 12 percent below the 5-year average for the report week, and 20
percent below the level last year for the same week. The implied net injection during the week of June 27 was 83 Bcf,
which is about 51 percent more than the 5-year average injection of 55 Bcf for
the week, continuing the pattern of robust net injections into storage. Over the last 15 weeks, net additions into
storage totaled 1,409 Bcf or 94 Bcf per week. The year-on-year storage deficit
has declined for the fourteenth week in a row, falling 35 Bcf to 502 Bcf. To reach the 3 trillion cubic foot mark by
November 2003, net injections would have to average roughly 69 Bcf per week
over the next 14 weeks. (See
Temperature Map.) (See Deviation Map)
All Volumes
in Bcf |
Current
Stocks 7/25/03 |
Estimated
Prior 5-Year (1998-2002) Average |
Percent
Difference from 5 Year Average |
Implied Net
Change from Last Week |
One-Week
Prior Stocks 7/18/03 |
|
East Region |
1,160 |
1,303 |
-11.0% |
63 |
1,097 |
|
West Region |
300 |
306 |
-2.0% |
0 |
300 |
|
Producing
Region |
572 |
680 |
-15.9% |
20 |
552 |
|
Total Lower
48 |
2,032 |
2,289 |
-11.2% |
83 |
1,949 |
|
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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LNG Imports Surge in Second Quarter: Imports of liquefied natural gas (LNG) in
the Lower 48 States rose to 129 Bcf during the second quarter of 2003,
according to preliminary estimates by the Office of Fossil Energy (OFE).
Including first quarter deliveries of 75 Bcf, LNG imports through the first
half of the year total 204 Bcf, a pace that will likely result in LNG volumes
for 2003 far exceeding the 1979 record total of 252.6 Bcf. Deliveries for the
second quarter were 67 percent higher than imports during the quarter last
year, as relatively high U.S. prices attracted numerous spot cargoes, particularly
to the Trunkline LNG terminal in Lake Charles, Louisiana. The Lake Charles
terminal received 30 cargos for total imports of 73 Bcf, more than double the volume
received during the first quarter. The terminal's average daily send-out for
the quarter was approximately 800 million cubic feet, which is higher than its
baseload capacity but about 80 percent of its peak capacity. Lake Charles
received cargos from Algeria, Nigeria, and Trinidad. Distrigas' terminal in
Everett, Massachusetts, received 17 cargos for a total of 37.9 Bcf. All
deliveries were from Trinidad. El Paso's Elba Island terminal received 18 Bcf
from 8 shipments, all of which also were from Trinidad. In total, Trinidad,
where Trains 2 and 3 are operational at the Atlantic LNG facility, was the
source country for 86 Bcf. Dominion's Cove Point, Maryland, facility, which
received a test cargo this week, was not in operation during the second
quarter. Cove Point will add up to 1 Bcf/d of peak import capacity during the
third quarter.
Summary:
Moderating cooling demand for natural gas in most
parts of the country and continuing robust injections into storage contributed
to declining prices at most locations across the Lower 48 States and at the
NYMEX futures market. Working gas in
storage increased to 2,032 Bcf, which is 12 percent below the 5-year
average.