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U.S. LNG Markets and Uses: June 2004
Natural Gas Restructuring
The Global Liquefied Natural Gas Market: Status and Outlook
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U.S. Natural Gas Pipeline and Underground Storage Expansions in 2003
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Overview:  Thursday, January 13 (next release 2:00 p.m. on January 21)

Moderate temperatures throughout most of the country kept natural gas spot prices close to those of last week at most trading locations in the Lower 48 States. For the week (Wednesday-Wednesday, January 5-12), the price for next-day delivery at the Henry Hub rose 5 cents per MMBtu, or about 1 percent to $5.89. The NYMEX futures contract for February delivery at the Henry Hub yesterday (January 12) settled at $5.943 per MMBtu, which was 11 cents less than last Wednesday’s price. Natural gas in storage decreased to 2,610 Bcf as of January 7, which is about 14.0 percent above the 5-year average. The crude oil price continues to provide upward pressure on energy prices. The spot price for West Texas Intermediate (WTI) crude oil moved up $3.05 per barrel or about 7 percent since last Wednesday to $46.46 per barrel or $8.01 per MMBtu.




The Henry Hub spot price generally declined from mid-December to early January as temperatures were moderate and space-heating demand was weak. The reversal to the late December trend, which began last week, continued as updated forecasts showed that a massive cold front is expected in the Midwest and Northeast later this week. The Henry Hub price rose 38 cents per MMBtu to $5.89 in Monday trading, but drifted lower in the ensuing two trading sessions and ended the week at $5.89, which was a net gain of 5 cents per MMBtu. At other Gulf region pricing points, prices generally gained 8 cents per MMBtu or less given the prevailing relatively moderate conditions of this early January. At the New York citygate off Transcontinental Gas Pipe Line, the spot price decreased 19 cents per MMBtu to $6.42. As a result, the basis differential between the Northeast and Gulf-area producing region markets has dropped from relatively high levels in mid-December closer to historical norms of about 50-60 cents per MMBtu. In the Rockies and California, mild temperatures resulted in price declines of 13 cents per MMBtu or less since last Wednesday. The price for deliveries at the trading point in Opal, Wyoming, fell 5 cents to $5.45 per MMBtu.



At the NYMEX, the futures contract for February delivery settled yesterday at $5.943 per MMBtu, which is 11 cents higher on the week. Price movements in the futures market during the past week were similar to spot market changes, with small decreases in value during three trading sessions, but larger gains in the other two. The price for the March contract gained 10.3 cents on the week, rising to just over $6.00 per MMBtu. During the week, the value of contracts for gas deliveries further into the future also fluctuated closely with the February and March contract prices. In fact, yesterday’s closing price of $6.21 per MMBtu for the 12-month strip, which is the average of futures prices for the coming year, represented an increase of 11 cents per MMBtu on the week, matching the increase for the near-month contract.


Recent Natural Gas Market Data


Estimated Average Wellhead Prices








Price ($ per Mcf)







Price ($ per MMBtu)







Note: Prices were converted from $ per Mcf to $ per MMBtu using an average heat content of 1,027 Btu per cubic foot as published in Table A4 of the Annual Energy Review 2002.

Source:  Energy Information Administration, Office of Oil and Gas. 



Working gas in storage was an estimated 2,610 Bcf as of Friday, January 7, 2005, according to the EIA Weekly Natural Gas Storage Report. This level of underground storage inventory is 321 Bcf, or 14.0 percent, more than the 5-year average for the report week and 152 Bcf, or 6.1 percent, higher than the level last year.(See Storage Figure) The implied net withdrawal during the report week was 88 Bcf, which is considerably lower than the interpolated 5-year average withdrawal for the week of 165 Bcf. Warmer-than-normal temperatures across much of the Lower 48 States likely contributed to the relatively low net withdrawals of natural gas from storage. As measured by heating degree days (HDDs) for the week ending January 8, the weather was 19 percent warmer than normal for the United States as a whole, according to the National Weather Service. The above-normal temperatures were especially pronounced in major gas-consuming markets during the report week.  For example, the weather for the Mid-Atlantic region was about 26 percent warmer than normal. The East North Central region, which includes Chicago, was 20 percent warmer than normal (See Temperature Map) (See Deviations Map).



Other Market Trends:

EIA Releases a Summary of Major Legislative and Regulatory Actions (1935 – 2004):  The Energy Information Administration (EIA) on January 7, 2005, published a summary of key Federal legislative and regulatory actions relating to the natural gas industry and markets entitled, Natural Gas: Major Legislative and Regulatory Actions (1935 - 2004).  Regulatory oversight of the interstate natural gas market began in the 1930’s with concerns about the possible exercise of monopoly power by interstate pipeline companies.  The natural gas market has changed significantly since the 1930’s and most importantly since the 1970’s, as legislative and regulatory initiatives have combined with market forces to form a more competitive natural gas industry.  The web page presents a chronology of some of the key Federal legislative and regulatory actions that have helped reshape the natural gas market, with particular emphasis on policy directives during the past 26 years.  The linked files provided on the web site provide brief descriptions of specific legislation, regulations, or policies, and their impacts on the natural gas market.


EIA Requests Comment on WNGSR Revision Policy:  On Friday, January 7, the Energy Information Administration (EIA) issued a Federal Register notice soliciting public comments on its policy for revisions to the Weekly Natural Gas Storage Report (WNGSR). Comments are due by February 7, 2005. The decision to look for public comment follows the revision of WNGSR data for the week ending November 19, 2004. Those estimates were released on November 24, 2004, and revised in the next regularly scheduled WNGSR issue on December 2, 2004, in accord with the WNGSR revision policy established in 2002.  The current policy was established on the basis of public comments made in response to a previous Federal Register notice. However, EIA is now reconsidering its policy. In its current Federal Register notice, EIA outlines several important issues. These include the size of a revision justifying a revised WNGSR release, the problem of equal and adequate notification of an upcoming revision, and the timing of revisions in light of government and market hours of operation. EIA has a copy of the Notice, including information about how to submit comments, on its web site at:



Spot prices at most market locations in the Lower 48 States were little changed in comparison with the previous week as moderate temperatures dominated most of the country. For the week, the price at the Henry Hub increased 1 percent to $5.89 per MMBtu. Futures prices increased generally about a dime for delivery months over the next year. Storage withdrawals were 88 Bcf, leaving stocks at 14 percent above the 5-year average. 


  Short-Term Energy Outlook





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