for week ending May 23, 2007 | Release date: May 24, 2007 | Previous weeks
Overview: Thursday, May 24, 2007 (next release 2:00
p.m. on May 31, 2007)
Natural
gas spot prices decreased or remained unchanged at almost all trading locations
in the Lower 48 States since Wednesday, May 16, 2007.For the week (Wednesday - Wednesday, May 16 to
May 23), the spot price at the Henry Hub decreased 9 cents, or about 1 percent,
to $7.53 per MMBtu. The price of the
NYMEX futures contract for June delivery settled at $7.757 per MMBtu yesterday,
which is 13 cents or about 2 percent less than last Wednesday. As of Friday, May 18, 2007, natural gas in
storage was 1,946 Bcf, or 20.7 percent above the 5-year average. The spot price for West Texas Intermediate
(WTI) crude oil was $65.10 per barrel or $11.22 per MMBtu as of yesterday. This is $2.53 per barrel more than the price
last week, an increase of about 4 percent.
As
the spring season proceeds, the country is anticipating hot summer temperatures
and an active Atlantic hurricane season, as predicted by the National Oceanic and
Atmospheric Administration (see below). For now, however, most of the country is enjoying moderate temperatures
with small areas of lingering heating load that is keeping natural gas spot
prices from fluctuating too far in any one direction. While spot prices at many trading locations were
up by the middle of the report week (Wednesday to Wednesday, May 16 to May 23),
almost all prices ended the week less than or about equal to last Wednesday's
prices. The Henry Hub
spot price, which reached as high as $7.87 on Friday, May 18, finished the week
at $7.53 per MMBtu yesterday, a decrease of 9 cents or about 1 percent on the
week. A similar pattern prevailed in
South and East Texas, where markets experienced gains as large as 25 cents
early in the report week. A lack of
weather-related demand, however, resulted in an average regional price of $7.34
per MMBtu yesterday, which is 11 cents less than last Wednesday. The highest spot prices are currently in the
Northeast, which is still experiencing temperatures causing some heating load. The average regional price in this region
yesterday was $8.15 per MMBtu, which is 2 cents less than the price last
Wednesday. At the other end of the
spectrum is the Rocky Mountain region where many markets were trading at prices
less than $4 per MMBtu. The lack of
weather-based load in this region is reflected by the average regional price of
$4.81 per MMBtu yesterday, a decrease of 24 cents per MMBtu on the week. The net decrease in this region occurred
despite price increases at two El Paso trading locations (Bondad and
non-Bondad) of 74 cents and 59 cents, respectively, on the week as capacity was
restored after a total outage on the San Juan Crossover.
Recent Natural Gas Market Data
Estimated Average Wellhead Prices |
||||||
|
Nov-06 |
Dec-06 |
Jan-07 |
Feb-07 |
Mar-07 |
Apr-07 |
6.43 |
6.65 |
5.92 |
6.66 |
6.56 |
6.84 |
|
Price ($ 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 was 1,946 Bcf as of Friday, May 18, 2007, according to EIA's Weekly Natural Gas Storage Report (see Storage Figure). Stock levels are currently 20.7 percent above
the 5-year average of 1,612 Bcf, but 9.5 percent below last year's level of
2,151 Bcf. The implied net injection
this week was 104 Bcf, which is relatively large compared with both the 5-year
average injection (85 Bcf) and last year's injection (84 Bcf). This is the fourth week in a row that the
implied net injection has exceeded both the 5-year average and the equivalent
net injection last year, which means the storage overhang compared with the
5-year average has increased to 334 Bcf. One factor contributing to the large injections of natural gas was
moderate, spring-like temperatures for most of the Nation during the report week
(see
Temperature Maps). Although temperatures for most of the country
were warmer than normal as measured by heating and cooling degree-days
published by the National Weather Service, average temperatures were mostly
between 55 and 75 degrees Fahrenheit, which limited any weather-based demand
for natural gas. Another factor that may
have contributed to the relatively large net injection was the relatively large
premium for futures contracts for delivery of natural gas next winter. When the futures prices are above spot
prices, market participants have large economic incentives to place natural gas
into storage.
Other Market
Trends:
NOAA Predicts a More Active Than Normal 2007 Atlantic Hurricane Season: In
their May 22, 2007, outlook, scientists at the National Oceanic and Atmospheric
Administration (NOAA) Climate Prediction Center (CPC) project a 75 percent
chance that the storm activity in the 2007 Atlantic Hurricane Season will be
above normal, and recommend that hurricane-prone regions begin their
preparation plans. According to the report, NOAA predicts 13 to 17 named
storms, with 7 to 10 becoming hurricanes. Furthermore, three to five of the
predicted hurricanes could become major hurricanes of Category 3 or stronger.
Conditions conducive to above-average hurricane season activity continue, such
as warmer-than-normal sea surface temperatures in the Atlantic Ocean and the El
Niño/La Niña cycle. While some uncertainty remains related to the La Niña
event, the CPC indicates that La Niña could form in the next 1 to 3 months, and
if it develops, storm activity may be even higher than predicted, depending on
the strength of the La Niña event.
EIA's International Outlook for Natural
Gas:The Energy Information Administration (EIA) projects that consumption of
natural gas will increase from 100 trillion cubic feet (Tcf) in 2004 to 163 Tcf
in 2030, according to the International Energy
Outlook 2007 (IEO2007). The report, released Monday, May 21, provides
projections of worldwide energy markets by fuel type and region to the year
2030. EIA expects natural gas to remain
a key fuel in the electric power and industrial sectors because of its relative
fuel efficiency and its potential to displace coal and liquids in the effort to
reduce carbon dioxide emissions. The
industrial sector, which accounted for 44 percent of world natural gas
consumption in 2004, is projected to increase consumption at an average annual
rate of 1.9 percent between 2004 and 2030. The increase in total consumption is
most rapid in countries outside of the Organization for Economic Cooperation
and Development (OECD).In the IEO2007, natural gas consumption in the
non-OECD countries is projected to increase 2.6 percent on average per year
between 2004 and 2030, compared with an average annual growth of 1.2 percent
for the OECD countries. EIA projects
that production increases also will be more rapid in the non-OECD countries. Natural gas production in the non-OECD countries
increases by an average of 2.6 percent per year in the IEO2007, compared with an average increase of only 0.4 percent per
year for OECD countries. As a result,
the OECD countries, which accounted for 40 percent of world natural gas
production and 52 percent of consumption in 2004, are expected to account for
27 percent of production and 43 percent of consumption in 2030. EIA projects that this will lead OECD
countries to increase the amount of imports to meet natural gas demand,
including greater amounts of liquefied natural gas (LNG). In 2030, more than one-third of the natural
gas consumed in OECD countries is projected to come from other parts of the
world, compared with 22 percent in 2004.
Carbon Dioxide Emissions from Fossil Fuels Declined in 2006: U.S. carbon dioxide emissions from burning fossil
fuels decreased by 1.3 percent in 2006, from 5,955 million metric tons of
carbon dioxide (MMTCO2) in 2005 to 5,877 MMTCO2 in 2006, according to preliminary
estimates released May 23 by the Energy Information Administration
(EIA). The economy, as measured by Gross
Domestic Product (GDP), grew by 3.3 percent and energy demand fell by 0.9
percent, indicating that energy intensity (energy use per unit of GDP) fell by
4.2 percent. Carbon dioxide intensity (CO2 emission per unit of GDP) fell by
4.5 percent. Factors that drove emissions lower include weather conditions that
reduced the demand for heating and cooling services; higher energy prices for
natural gas, motor gasoline, and electricity that reduced energy demand; and
the use of a less carbon-intensive fuel mix (more natural gas and non-carbon
fuels) in the generation of electricity. Through 2006, total U.S. energy-related carbon dioxide emissions have
grown by 17.9 percent since 1990. Energy-related carbon dioxide emissions
account for over 80 percent of U.S. greenhouse gas emissions. EIA will continue to refine its estimates of
2006 carbon dioxide emissions as more complete energy data become available. A
full inventory of 2006 emissions of all greenhouse gases to be issued in
November 2007 will present revised energy data and provide a further analysis
of trends.
Natural Gas Transportation Update: