for week ending May 3, 2006 | Release date: May 4, 2006 | Previous weeks
Overview: Thursday, May 4 (next release 2:00 p.m. on May 11, 2006)
Natural gas spot prices decreased at all market
locations in the Lower 48 States since Wednesday, April 26, 2006. For the week (Wednesday, April 26 to
Wednesday, May 3), the spot price at the Henry Hub decreased 62 cents, or about
9 percent, to $6.56 per MMBtu. The price
of the NYMEX futures contract for June delivery settled at $6.606 per MMBtu
yesterday (May 3), which is 67 cents or about 9 percent less than last
Wednesday's level. As of Friday, April
28, 2006, natural gas in storage was 1,904 Bcf or 58 percent above the 5-year
average of 1,205 Bcf. The spot price for
West Texas Intermediate (WTI) crude oil was $72.26 per barrel or $12.46 per
MMBtu as of yesterday. This is 55 cents
per barrel more than the price last week, an increase of about 1 percent.
Natural gas spot prices decreased at virtually all
market locations in the Lower 48 States for the week, reflecting predominantly
moderate temperatures that likely reduced both late-season space heating demand
and early-season air conditioning load. The declines, which ranged mostly between 20 cents and 70 cents per
MMBtu, occurred despite increases in crude oil prices this week which remain
near record-high levels. Since last
Wednesday, April 26, the Henry Hub spot price decreased 62 cents, or about 9
percent, to $6.56 per MMBtu.Similar
declines, averaging about 59 cents, were seen in all the producing regions
around the Gulf Coast. Along with the
Northeast, where decreases averaged about 62 cents per MMBtu, and Florida,
which decreased over $1.00 per MMBtu, these were the largest declines during
the week. Most other market locations in
the Lower 48 States had decreases of less than 32 cents per MMBtu. Spot prices
are generally similar to this time last year. For example, yesterday's Henry Hub spot price is 5 cents per MMBtu less
than on the same date last year, and the spot price at Transco Zone 6 in New
York yesterday ($7.09 per MMBtu) is 1 cent per MMBtu less than the same date
last year. The spot price at Chicago
City Gates, on the other hand, is significantly lower than last year, at $6.16
per MMBtu yesterday compared with $6.62 per MMBtu last year.
At
the NYMEX, the price of the futures contract for June delivery at the Henry Hub
decreased to $6.606 per MMBtu in its first week of trading as the near-month
contract. This represents a decline of
67 cents or about 9 percent on the week (Wednesday to Wednesday), or about 20
cents since becoming the near-month contract on Thursday, April 27. The large differential between the Henry Hub
spot price and the futures contracts for next winter continues to provide
economic incentives to inject natural gas into storage.At $11.456 per MMBtu, the January 2007
contract held a $4.90 premium to the Henry Hub spot price yesterday. The
12-month strip, or the average price for futures contracts over the next year
(June 2006 - May 2007), settled yesterday at $9.03 per MMBtu, a decline of 48
cents per MMBtu since last Wednesday, April 26.
Recent Natural Gas Market Data
Estimated Average Wellhead Prices |
||||||
|
Oct-05 |
Nov-05 |
Dec-05 |
Jan-06 |
Feb-06 |
Mar-06 |
10.97 |
9.54 |
10.02 |
8.66 |
7.28 |
6.52 |
|
Price
($ per MMBtu) |
10.68 |
9.29 |
9.76 |
8.43 |
7.09 |
6.35 |
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 inventories increased to 1,904 Bcf as of Friday, April 28, according to
EIA's Weekly Natural Gas Storage Report
(See Storage Figure). After 4 consecutive weeks of net injections,
stocks were 699 Bcf, or about 58 percent, above the 5-year average inventory
level for this week. The implied net injection
of 53 Bcf is 11 Bcf less than the 5-year average net injection of 64 Bcf, but 9
Bcf more than the net injection for this week last year. Moderate temperatures likely lowered
weather-related natural gas demand for the Lower 48 States as a whole during
the week ending Thursday, April 27 (See Temperature Maps). Still, cool temperatures in New England,
which was about 12 percent colder-than-normal, likely influenced some
late-season heating demand in key markets. Similarly, high temperatures in the South Atlantic and the West South
Central Census Divisions may have sparked some early-season demand for
natural-gas fired electric power generation from air conditioning load.
Other Market Trends:
MMS Issues Its Final Report on the
Effects of Hurricanes Katrina and Rita. The Minerals Management Service (MMS) reported that 1.3 Bcf per day of
natural gas production in the Gulf of Mexico remained shut in as of Wednesday,
May 3. This is about 12 percent of total annual marketed production in the
Federal Offshore Gulf of Mexico. Cumulative shut-in natural gas production from
August 16, 2005 through May 3, 2006, totaled nearly 749 Bcf, which is
equivalent to 18.9 percent of annual production in the Gulf of Mexico and about
3.9 percent of annual U.S. natural gas production. At 1.3 Bcf per day, the daily shut-in rate is
down significantly from October 2005 when shut-ins reached about 5.6 Bcf per
day. However, production increases in
the Federal Offshore have become relatively small in recent months, with
current production levels only 0.6 Bcf per day more than on April 5, 2006. Given these relatively small variations in
the shut-in statistics and the looming 2006 hurricane season, the MMS noted
that this will be its final report on the effects of Hurricanes Katrina and
Rita on natural gas production.
Natural Gas Transportation Update: