for week ending November 29, 2006 | Release date: November 30, 2006 | Previous weeks
Overview: Thursday, November 30 (next release 2:00 p.m. on December 7, 2006)
Natural
gas spot prices increased at nearly all market locations in the Lower 48 States
since Wednesday, November 22, 2006, with some Midcontinent and Western regions showing
increases of more than $2 per MMBtu. With
only 3 trading days included in the report week owing to the Thanksgiving
holiday, the spot price at the Henry Hub increased by 34 cents, or about 5 percent,
to $7.75 per MMBtu. The price of the
NYMEX futures contract for January delivery settled at $8.871 per MMBtu
yesterday (November 29), which is 77 cents, or about 10 percent, more than last
Wednesday, and the December 2006 contract expired Tuesday at $8.318 per
MMBtu. As of Friday, November 24, 2006,
natural gas in storage was 3,417 Bcf or 7.2 percent above the 5-year average. The spot price for West Texas Intermediate
(WTI) crude oil rose to $62.45 per barrel or $10.77 per MMBtu yesterday. This price is $5.17 per barrel, or 9 percent,
more than the price last week and is the highest price since late September.
Although
natural gas spot prices rose in almost all market locations this week, shifting
weather patterns across the Lower 48 States created wide price variations among
the regions. Moderate temperatures in
the Midcontinent and the West last week were replaced by winter-like conditions
after the Thanksgiving holiday, which spurred an increase in heating
demand. West Texas, the Midcontinent,
and the Rockies, which recorded price decreases of more than $1 per MMBtu at
many locations last Wednesday (November 22), also saw gains since then ranging as
high as $2.95 per MMBtu. Average
increases per MMBtu in these regions were $2.21 (West Texas), $2.07
(Midcontinent), and $2.04 (Rocky Mountains) since last Wednesday. Anticipation of similar cold temperatures,
which are expected to reach the South and Northeast by the end of this week,
likely placed upward pressure on other market prices as well. The price at the Henry Hub was $7.75 per
MMBtu yesterday, which is an increase of 34 cents, or 5 percent, since last
Wednesday. Prices in the Northeast,
which averaged $7.96 per MMBtu yesterday, showed the smallest gains ranging
between 2 cents and 25 cents per MMBtu for the week. Besides increased heating demand, increasing
crude oil prices and transportation constraints may have contributed to the
upward pressure on prices. The WTI
increased by more than $5 to $62.45 per barrel during this report week after
falling to $55.90, which was the lowest price since June 2005, during the
previous week. Also, announcements of strained
operating conditions and overrun entitlements in the Northwest alerted
customers to potential supply constraints on pipelines in this region (see
Transportation Update).
Estimated Average Wellhead Prices |
||||||
|
May-06 |
June-06 |
July-06 |
Aug-06 |
Sep-06 |
Oct-06 |
6.19 |
5.80 |
5.82 |
6.51 |
5.51 |
5.03 |
|
Price
($ per MMBtu) |
6.03 |
5.65 |
5.67 |
6.34 |
5.37 |
4.90 |
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 decreased to 3,417 Bcf as of Friday, November 24, which is 7.2
percent above the 5-year average according to the EIA Weekly Natural Gas Storage Report (See Storage Figure). The implied net withdrawal during the week
was 32 Bcf, which is 10 Bcf more than the 5-year average withdrawal for this
week, but 11 Bcf less than last year's withdrawal of 43 Bcf.It is the third and largest withdrawal in the
4 weeks since the heating season began. By
comparison, the first withdrawal of the season was reported this week last year. However, since storage inventories have been
high this year and the recent withdrawals have been relatively modest, storage
levels continue to remain notably above the past year's level and the 5-year
average. The difference between the
current inventory level and the 5-year average decreased to 230 Bcf this week,
which is the smallest margin of this kind since the week ending December 30,
2005. Stock levels also exceed
year-earlier levels by 185 Bcf, or about 5.7 percent.On a regional basis, the West region recorded
an injection of 1 Bcf, while the East and Producing regions withdrew 28 and 5
Bcf, respectively. Temperatures across the country likely contributed to the
regional pattern this week as the Mountain and Pacific Census Divisions were
more than 30 percent warmer than normal for the week ending November 23, as
measured by the National Weather Service's heating degree-days (See
Temperature Maps). The
Lower 48 States were about 7 percent warmer than normal, while the South
Atlantic and South Central Census Divisions were 12 to 34 percent colder than normal.
EIA Publishes the Natural Gas Annual
2005: The Energy Information
Administration (EIA) on November 16, 2006, published the Natural
Gas Annual 2005 (NGA2005), which provides comprehensive
information on the supply and disposition of natural gas in the United States.
According to the NGA2005, the national average wellhead price for natural gas
in 2005 was $7.33 per thousand cubic feet (Mcf), 34
percent higher than the 2004 average of $5.46 per Mcf. Recorded U.S. marketed
production was 18.95 trillion cubic feet (Tcf), which
was about 2.9 percent below the level in 2004. A key factor reducing marketed production in 2005 was the production
shut-ins caused by Hurricanes Rita and Katrina at the end of summer 2005. Total natural gas imports increased in 2005
by almost 2 percent to 4.3 Tcf. Overall,
prices were higher, but supplies and consumption decreased from the previous
year's levels. The NGA2005 also includes
data for production, transmission, storage, deliveries, and price by State for
2005, as well as summary statistics for each State for 2001 through 2005.