for week ending June 1 , 2005 | Release date: June 2, 2005 | Previous weeks
Overview:
Thursday, June 2 (next release
Natural
gas spot prices fell at virtually all market locations in the Lower 48 States during
the holiday-shortened trading week (Wednesday to Wednesday, May 25-June 1),
while futures prices increased. The spot price at the Henry Hub, however, rose
by 3 cents per MMBtu on the week, or nearly 0.5 percent, to $6.36 per MMBtu. On the New York Mercantile Exchange (NYMEX),
the June contract expired at $6.123 per MMBtu on May 26 after declining 19
cents in its final day of trading. The settlement price for the futures
contract for July delivery at the Henry Hub increased by 42 cents on the week,
settling yesterday (June 1) at $6.789 per MMBtu. EIA reported that inventories of working gas in underground
storage were 1,778 Bcf as of Friday, May 27, which is 20.6 percent higher than
the 5-year average. The spot price for
West Texas Intermediate (WTI) crude oil gained $4.03 per barrel, or 8 percent,
since last Wednesday (May 25), ending trading yesterday at $54.40 per barrel
($9.38 per MMBtu), which is the highest spot price since the April 6, 2005,
price of $55.88 per barrel.
Spot
prices at virtually all market locations in the Lower 48 States decreased on
the week by up to 41 cents per MMBtu. The Henry Hub was one of just four
markets where reported spot prices increased. The widespread price increases of
mostly a dime or less in the past day of trading were not enough to offset the
price declines of last Thursday and Friday (May 26-27).
At
the NYMEX, the futures contract for June delivery expired on Thursday, May 26,
at $6.123 per MMBtu, which is the lowest expiration price for a near-month
contract since
Recent
Natural Gas Market Data
Estimated Average Wellhead |
||||||
|
Dec-04 |
Jan-05 |
Feb-05 |
Mar-05 |
Apr-05 |
May-05 |
Price
($ per Mcf) |
6.25 |
5.52 |
5.59 |
5.98 |
6.44 |
6.02 |
Price
($ per MMBtu) |
6.08 |
5.37 |
5.44 |
5.82 |
6.27 |
5.86 |
Note:
|
||||||
Source: Energy Information Administration, Office
of Oil and Gas. |
Working
gas inventories were 1,778 Bcf as of Friday, May 27, with implied net
injections of 86 Bcf, according to EIA's Weekly
Natural Gas Storage Report (See Storage
Figure). This
leaves storage levels 20.6 percent above the 5-year average for this week and
14.6 percent above last year's level of 1,552 Bcf. The net injection slightly
exceeds the 5-year average of 85 Bcf for this week and marks the third week in
a row that injections exceeded the 5-year average. Since the beginning of the refill season (April through October
2005), net additions to storage have exceeded the 5-year average in 7 out of 9
weeks, and the storage surplus relative to the 5-year average has increased 77
Bcf to 304 Bcf. Overall, moderate
temperatures prevailed in the Lower 48 States during the week ended May 27,
contributing to the continued pace of above-average net additions to storage (See Temperature Maps). However,
cooler-than-normal temperatures in the Northeast and warmer-than normal
temperatures in the Southwest likely increased demand for natural gas in those
regions reducing net additions to storage somewhat.
Other
Market Trends:
EIA Reports on Financial
Performance of Major Energy Companies: On Tuesday,
May 31, the Energy Information Administration (EIA) issued its quarterly "Financial
News for Major Energy Companies" that describes the financial
results of 25 major energy companies for January to March 2005. According to the report, these companies reported
an overall net income in this year's first quarter of $20.4 billion, which is
44 percent higher than in the first quarter of 2004. Broken down by worldwide lines of business, petroleum operations
increased net income by 30 percent between first quarter 2004 and first quarter
2005. This jump consists of a 27
percent increase in income from oil and natural gas production and a 40 percent
increase in income from refining and marketing. EIA also reported a 70 percent rise in income from downstream natural
gas and power operations and a 202 percent rise for chemical operations. These upward trends in income occurred
despite decreases in foreign and domestic production of both oil and natural
gas. Oil production is down 3 percent
domestically and 1.4 percent abroad.
Natural gas has seen decreases in production of 2.5 percent domestically
and 3 percent abroad. The EIA report
states that between the first quarter of 2004 and the first quarter of 2005,
the average
Minerals Management Service Announces Results of Lease
Summary:
Natural
gas spot prices decreased by as much as 7 percent at virtually all market
locations as the expected ease on the industrial load over the holiday weekend
and mild weather contributed to widespread declines on the spot market. Natural gas futures prices during the past
week, however, influenced by higher crude oil and petroleum products futures
prices, showed an average increase of more than 5 percent through June 2006.
Although the June contract expired at a relatively low price of $6.123 on May
26, the July contract price increased during the past three trading sessions to
settle 42 cents, or almost 7 percent, above the prior week's level. Natural
gas in storage increased to 1,778 Bcf as of May 27, leaving inventories 20.6
percent above the 5-year average.