for week ending May 2, 2007 | Release date: May 3, 2007 | Previous weeks
Overview: Thursday, May 3, 2007 (next release 2:00 p.m.
on May 10, 2007)
Since
Wednesday, April 25, natural gas spot price movements were mixed in the Lower
48 States, with decreases principally occurring west of the Rocky Mountains and
increases predominant to the east of the Rockies. Prices at the Henry Hub increased a nickel since
Wednesday, April 25, to $7.64 per MMBtu. At the NYMEX, the futures contract for June delivery at the Henry Hub
declined about 5 cents per MMBtu, or less than 1 percent since Wednesday, April
25, to settle at $7.730 per MMBtu yesterday (Wednesday, May 2). Natural gas in storage was 1,651 Bcf as of April
27, which is 19 percent above the 5-year average (2002-2006). The spot price for West Texas Intermediate
(WTI) crude oil declined $1.55 per barrel on the week (Wednesday-Wednesday) to
$63.78 per barrel or $11.00 per MMBtu.
Spot
price movements were mixed since last Wednesday, April 25, as moderate temperatures
prevailed across most of the Lower 48 States.Moderating temperatures and easing industrial gas demand heading into
the weekend likely contributed to significant price declines of up to 38 cents
per MMBtu on Friday, April 27. However,
prices recovered on Monday, April 30, with the return of the workweek, and
summer-like temperatures, which contributed to increased power generation
demand in parts of the Southeast.Since
Wednesday, April 25, prices generally increased in the regions east of the Rockies,
gaining up to 14 cents per MMBtu at most market locations. However, selected locations in the Midwest,
Midcontinent, and Texas regions experienced larger price hikes of up to 35
cents per MMBtu. These spikes led to the
largest average regional increases since last Wednesday, April 25, as prices
rose between 8 and 12 cents per MMBtu on average in the Midwest, Midcontinent,
and East Texas regions.Elsewhere,
average regional price increases were less than 5 cents per MMBtu.West of the Rockies, prices generally
declined. The Rocky Mountains region
posted the lowest prices as prices fell by as much as 79 cents per MMBtu at
selected locations and by 37 cents per MMBtu on average in the region. Transportation constraints in the region
continued to contribute to relatively steep discounts at selected markets.Prices in the Arizona/Nevada region declined
by 9 cents per MMBtu on average. The
average price in California realized a gain of less than a penny since last
Wednesday, April 25, as increases in northern market locations more than offset
decreases in the southern markets. In
general, prices exceeded levels reported last year at this time, with prices at
the Henry Hub 96 cents per MMBtu or 14 percent above last year's level. As one exception, prices at selected markets in
the Rocky Mountains region were about $1.05 per MMBtu or about 19 percent below
last year's level.
At the NYMEX, prices for the futures contracts for the
next 12 months decreased across the board with the 12-month futures strip (June
2007 through May 2008) falling about 7 cents per MMBtu, or less than 1 percent,
since last Wednesday, April 25. Reflecting conditions on the spot markets for
natural gas, prices declined slightly in the futures markets. The price of the NYMEX futures contract for June
delivery at the Henry Hub settled at $7.73 per MMBtu on Wednesday, May 2, falling
about 5 cents per MMBtu, or less than 1 percent for the week. Prices for delivery in the refill season
months (June through October) decreased by a little more, with an average decline
of 7 cents per MMBtu.Overall, the 12-month
futures strip (June 2007 through May 2008) traded at a premium of about $1.01 per
MMBtu relative to the Henry Hub spot price, averaging $8.65 per MMBtu as of
Wednesday, May 2. These relative pricing
patterns reflect ample incentives for suppliers to inject natural gas into
storage. The contract for May delivery
at the Henry Hub expired on Thursday, April 26, at $7.508 per MMBtu, posting a
decline of about 10 cents per MMBtu in its tenure as the near-month contract.
Recent Natural Gas Market Data
Estimated Average Wellhead Prices |
||||||
|
Nov-06 |
Dec-06 |
Jan-07 |
Feb-07 |
Mar-07 |
Apr-07 |
6.43 |
6.65 |
5.92 |
6.66 |
6.56 |
6.84 |
|
Price ($ per MMBtu) |
6.26 |
6.48 |
5.76 |
6.48 |
6.39 |
6.66 |
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 1,651 Bcf as of Friday, April
27, which is about 19 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 April 27, stocks were
245 Bcf below the 1,896 Bcf in storage at this time last year, yet still
exceeded the 5-year average by 266 Bcf. On the week, net injections into working gas
storage totaled 87 Bcf compared with the 5-year average injection of 54 Bcf and
last year's net injection of 56 Bcf for the same report week. Warmer-than-normal temperatures likely
contributed to the above-normal injections as heating degree-days fell below
both the normal level by significant margins in each of the Census Divisions
east of the Rocky Mountains (see Temperature Maps).
In the high gas-consuming areas of the New England, Middle Atlantic, and East
North Central Census Divisions, heating degree-days, as reported by the
National Weather Service, ranged between 33 and 36 percent below historical
norms. Temperatures in the Pacific and
Mountain Census Divisions exceeded historical norms by 17 and 4 percent,
respectively.
Natural Gas Deliveries Increase to End
Users: Cold weather along with
relatively stable prices during February 2007 led to significant increases in
natural gas consumption in all four end-use sectors. According to the Energy
Information Administration's (EIA) Natural
Gas Monthly, natural gas deliveries to residential consumers
totaled 32.1 Bcf per day during February 2007, which was about 24 percent
higher than the 25.9 Bcf per day delivered in January and 29 percent higher
than the February 2006 level. The year-to-date (through February) deliveries of
1.7 Tcf to residential consumers were nearly 21 percent higher than last year's
total for the same period. A similar trend was observed in the commercial
sector, where consumption totaled 17.1 Bcf per day in February, 23.0 percent
above the January consumption in the sector of 13.9 Bcf per day and 21.3
percent higher than the volume in February 2006. A key factor behind the
significant increase in residential and commercial consumption was the cold
winter weather. As measured by National Weather Service heating degree-days
(HDD), temperatures in February were 16 percent colder than normal and about 18
percent colder than for the same month last year, significantly boosting
space-heating demand. Natural gas consumption by the electric power sector also
increased 3 percent during the month, reaching 14.8 Bcf, which was 19.4 percent
higher than the level in February 2006. Gas-fired generation in February was 17
percent of total net electricity generation in the United States. Deliveries to
the industrial sector remained fairly stable year-over-year, increasing less
than 3 percent in February 2007 (20.9 Bcf per day) over February 2006 (20.3 Bcf
per day). However, the industrial sector experienced a 6.6 percent increase in
consumption in February compared with January consumption of 19.6 Bcf per day.
Natural Gas Transportation Update: