for week ending December 6, 2006 | Release date: December 7, 2006 | Previous weeks
Overview: Thursday, December 7 (next release 2:00 p.m. on December 14, 2006)
Since
Wednesday, November 29, natural gas spot prices decreased more than 25 cents
per MMBtu at most market locations in the Lower 48 States although some markets
posted price hikes. On Wednesday,
December 6, prices at the Henry Hub averaged $7.34 per MMBtu, a decline of 41
cents per MMBtu, or about 5 percent, since the previous Wednesday. The NYMEX futures contract for January
delivery at the Henry Hub settled at $7.72 per MMBtu on Wednesday, December 6,
falling about $1.14 per MMBtu, or 13 percent, from the settlement price of
$8.871 recorded last Wednesday, November 29.Natural gas in storage was 3,406 Bcf as of December 1, which is 9 percent
above the 5-year average. The spot price
for West Texas Intermediate (WTI) crude oil decreased 25 cents per barrel, or
less than 1 percent, on the week (Wednesday-Wednesday) to $62.20 per barrel or
$10.72 per MMBtu.
Spot
prices decreased at most market locations since last Wednesday, November 29,
generally by more than 25 cents per MMBtu, although some markets, principally
located in the Northeast region, experienced price hikes. Intraweek trading was characterized by
considerable variability as prices recorded significant gains in trading on
Thursday, November 30, and Friday, December 1, as cold temperatures contributed
to increased heating demand for natural gas. These gains were followed by
moderating temperatures and widespread price declines, which more than offset
the preceding rally. For the week, the
largest price declines occurred principally in the western third of the Lower
48 States where prices fell by more than 50 cents per MMBtu at most market
locations with declines averaging 66 cents per MMBtu in California, 98 cents
per MMBtu in the Rocky Mountains region, and $1.36 per MMBtu in the
Midcontinent region. Elsewhere, price
decreases ranged between 25 and 50 cents per MMBtu at most market locations. In the Northeast region, prices fell less
than a penny on average, despite posting gains at a majority of market
locations in the region. Northeastern
markets that recorded price gains included the New York and the Algonquin
citygates, where prices increased 13 cents per MMBtu and 15 cents per MMBtu,
respectively. Prices remain
significantly below levels reported last year at this time, with prices at the
Henry Hub $6.46 per MMBtu or nearly 47 percent below last year's level.
Estimated Average Wellhead Prices |
||||||
|
June-06 |
July-06 |
Aug-06 |
Sep-06 |
Oct-06 |
Nov-06 |
5.80 |
5.82 |
6.51 |
5.51 |
5.03 |
6.43 |
|
Price
($ per MMBtu) |
5.65 |
5.67 |
6.34 |
5.37 |
4.90 |
6.26 |
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 totaled 3,406 Bcf as of Friday,
December 1, which is about 9 percent above the 5-year average inventory level
for the report week, according to EIA's Weekly Natural Gas Storage Report (See Storage Figure). As of December 1, stocks exceeded last year's
level by 232 Bcf and the 5-year average by 282 Bcf.
For the week, the implied net withdrawal of 11 Bcf
contrasts with the 5-year average withdrawal of 63 Bcf
and last year's injection of 58 Bcf.
Warmer-than-normal temperatures that prevailed during the report week in large
sections of the country likely contributed to the below-normal withdrawals from
working gas stocks as the moderate temperatures would have mitigated heating
demand for natural gas. During the report
week, heating degree-days in the Lower 48 States were about 28 percent below
normal levels.Heating degree-days fell
24 to 55 percent below normal levels in seven of the nine Census divisions. Only the Pacific and Mountain Census
divisions had above-normal heating demand with heating degree-days exceeding
normal levels by 29 and 8 percent, respectively. (See Temperature Maps)
EIA Releases Report on Crude Oil, Natural
Gas, and Natural Gas Liquids Reserves:
The Energy Information Administration (EIA) on December 5, 2006, published the U.S.
Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 2005 Annual Report,
which presents estimates of proved reserves of crude oil, natural gas, and
natural gas liquids as of December 31, 2005, as well as production volumes for
the United States by producing States and State subdivisions during 2005. The
report also highlights petroleum industry activities that affected oil and
natural gas production and proved reserves in 2005. According to the report,
proved reserves of dry natural gas in 2005 were 206,385 Bcf, which was 6.2
percent higher than the 2004 estimate of 192,513 Bcf. The 6.2-percent increase
was the largest annual increase in natural gas proved reserves since 1970. Reserves additions replaced 164 percent of 2005 dry
natural gas production as U.S. natural gas reserves increased for the seventh
year in a row. Natural gas reserves additions in the onshore Lower 48
States were large enough to offset a 10 percent decrease in natural gas
reserves reported for the Gulf of Mexico Federal Offshore. The majority of
natural gas reserves additions in 2005 resulted from extensions of existing gas
fields rather than new field or reservoir discoveries. Field extensions were
21,050 Bcf, 16 percent more than in 2004 and 74 percent more than the prior 10-year
average (12,101 Bcf). Coalbed methane reserves increased by 8 percent in 2005
and accounted for 10 percent of U.S. dry natural gas reserves. Furthermore,
exploratory and developmental natural gas completions increased 27 percent over
the 2004 level.
Natural Gas
Transportation Update: