xxxxx |
Home > Natural Gas > Natural Gas Weekly Update |
Overview: Friday, July 6, 2007 (next release 2:00 p.m.
on July 12, 2007) Natural
gas spot prices decreased sharply this week (Wednesday-Thursday, June 27-July
5), although crude oil prices continued to trade at near-record high levels.
For the week, the price at the Henry Hub decreased $0.45 per MMBtu, or about 7
percent, to $6.29. At the New York Mercantile Exchange (NYMEX), the price of
the futures contract for August delivery at the Henry Hub moved 47 cents per
MMBtu lower to settle yesterday (Thursday, July 5) at $6.618. Natural gas in
storage was 2,521 Bcf as of Friday, June 29, which is 16.9 percent higher than
the 5-year average. Crude oil prices continued to rise this week. The
spot price for West Texas Intermediate (WTI) crude oil increased $2.83 per barrel
or about 4 percent since last Wednesday (June 27) to trade yesterday at $71.81
per barrel or $12.38 per MMBtu. Spot prices decreased this week in nearly all trading regions in the Lower 48 States. The exceptions to the widespread price decreases occurred in the California and Rocky Mountain regions, where 80-degree and higher temperatures lingered for much of the report week, driving an increase in space-cooling load. In the Rockies, prices responded to the hot temperatures by increasing $0.43 per MMBtu on average for the region, resulting in an average regional price of $5.02 per MMBtu yesterday. Prices in California also moved up on the week, albeit slightly less so than in the Rockies, increasing by an average of 9.5 cents. In the remaining regions of the Lower 48 States, moderate temperatures and holiday-induced lower industrial load resulted in spot price decreases that ranged between 6 cents and $1.29 per MMBtu. The Henry Hub spot price decreased 45 cents or 6.7 percent, yesterday averaging $6.29 per MMBtu, which was the second-lowest Henry Hub price since April 2007, exceeding only the $6.24 per MMBtu price recorded this past Monday (July 2). Overall, prices at the other trading points in Louisiana decreased by an average of 53 cents to reach a regional average of $6.25 per MMBtu. Trading locations elsewhere along the Gulf Coast recorded average price decreases between 57 and 71 cents per MMBtu, or 8.6 and 9.8 percent. This week’s largest declines occurred at market locations in the Northeast, where prices declined by an average of $0.92 per MMBtu. The price for gas off the Transcontinental Gas Pipeline into New York City recorded the largest weekly decrease of all trading locations in the Lower 48 States, falling by $1.29 per MMBtu to $6.84. Despite the large decline, the average regional price in the Northeast was the highest in the Lower 48 States. Bidweek prices also reacted to the relatively mild weather, as well as the price movements of the futures market. According to the results of the bidweek survey, the Henry Hub price averaged $6.93 per MMBtu, while prices at the Transcontinental Pipeline (New York) averaged $7.72 per MMBtu. The Rocky Mountain region’s bidweek prices averaged $4.35 per MMBtu. The
prices of the NYMEX contracts for delivery through the end of the 2007-2008
heating season all declined this week, recording net weekly decreases between
3.4 and 6.6 percent. The futures contract for August delivery declined $0.465
per MMBtu on the week to end trading yesterday (July 5) at $6.618, which was
the lowest daily settlement price for a near-month contract since January 18,
2007, when the February futures contract settled at $6.324 per MMBtu. Similar
to price activity in the spot markets, the prices of futures contracts moved
lower this week in response to the moderate seasonal weather experienced
throughout much of the Lower 48 States, including the lack of tropical storm
activity that could disrupt supplies from the Gulf of Mexico producing region.
Furthermore, volumes of natural gas in storage have continued to be injected at
rates above last year for the past 10 weeks and remain well above the 5-year
average. The price of the near-month contract decreased in all but one trading
session during the report week, starting with the sizeable 43-cent per MMBtu
decrease during its first day of trading as the near-month contract. Similarly,
the futures contract for September delivery decreased about 45 cents or 6.2
percent per MMBtu on the week, settling yesterday at $6.726 per MMBtu. The
heating season futures strip traded yesterday at $8.496 per MMBtu, which was 32
cents or 3.7 percent lower than last Wednesday’s (June 27) price of $8.818. Currently,
the January and February 2008 contracts are the highest priced contracts over
the next 12 months, both closing yesterday at $8.839 per MMBtu. Recent Natural Gas Market Data
Working
gas in underground storage was 2,521 Bcf as of June 29, which is 16.9 percent
above the 5-year average inventory level for the report week, according to
EIA’s Weekly Natural Gas Storage Report (see Storage Figure). The implied net injection for the week was 78
Bcf, which is 9 percent lower than the 5-year average net injection of 86 Bcf
but about 8 percent higher than last year’s net injection of 72 Bcf. Current
inventories continue to remain below last year’s level, however the difference
declined for the 10th straight week, falling to 84 Bcf from 276 Bcf as of April
20. Warmer-than-normal temperatures that engulfed most of the Lower 48 States
during the report week and the resulting increased cooling load contributed to
the lower than average injection. The latest cooling degree-day (CDD)
statistics published by the National Weather Service for the period roughly
coinciding with the week covered by this storage report indicate that the
temperatures in the Lower 48 States were 8 percent warmer than normal (see
Temperature Maps), but about 7 percent cooler than last year
for the same week. All Census Divisions with the exception of the West South
Central had warmer-than-normal temperatures, as measured by CDDs. CDDs in most Census Divisions were more than
10 percent higher than normal. Other Market
Trends: EIA Releases a New Report on
Natural Gas Marketer Prices: On June 29, the Energy Information
Administration (EIA) released the report Natural
Gas Marketer Prices and Sales to Residential and Commercial Customers:
2002-2005, which compares data
on residential and commercial prices collected from natural gas marketers and
local distribution companies (LDC) between 2002
and 2005. In
2001, EIA developed the EIA-910, “Monthly Natural Gas Marketer Survey,” which
was designed to collect price and volume information on natural gas sales by
marketers selling to residential and/or commercial customers in States with
active customer choice programs. EIA
initiated the survey for marketers in five States (Georgia, Maryland, New York,
Ohio, and Pennsylvania). This report provides details on the
collection and analysis of data from natural gas marketers and LDCs in Maryland,
New York, Ohio, and Pennsylvania. Georgia was not included because most natural gas customers
in the State are required to purchase natural gas from marketers. The analysis of the four States examines
trends and differences observed in marketer and LDC prices collected on the
EIA-910 and the EIA-857, “Monthly Report of Natural Gas Purchases and
Deliveries to Consumers.” The
report also includes analysis of data from the EIA-176, “Annual Report of Natural and Supplemental Gas Supply and
Disposition,” which shows the percentage
of residential and commercial natural gas sales by marketers, as well as
the accompanying percentage of residential and commercial customers purchasing
natural gas from LDCs in the same period. Natural Gas Transportation Update: ·
Pacific Gas and
Electric Company, which serves customers in northern and central California,
issued a systemwide high-inventory operational flow order (OFO) for Saturday
and Sunday, June 30 and July 1. On
Saturday, the OFO was Stage 2 with a $1 per decatherm (Dth) penalty for
exceeding a 5-percent tolerance on positive daily imbalances. On Sunday, the OFO was upgraded to Stage 3
and penalties were increased to $5 per Dth.
·
Columbia Gulf Transmission was accepting nominations only up to 200,000
Dth per day at its interconnect with Sea Robin Pipeline because of gas quality
issues. The limits were effective
starting on Friday, June 29, until further notice. ·
Questar Pipeline Company reduced the capacity of a line segment near the
Oak Spring Compressor Station in Carbon County, Utah, from 375,000 Dth per day
to 365,000 Dth per day because of high temperatures that affected volumes
through the compressor station. The
reduction started on Sunday, July 1, and will last until further notice. ·
Maintenance caused Trunkline Gas Company to reduce capacity at the
Transco Ragley Interconnect in South Louisiana from a maximum capacity of
700,000 Dth per day to 425,000 Dth per day on Friday, June 29. Capacity was increased to 500,000 Dth per day
on June 30, and back up to maximum capacity on July 3. ·
Florida Gas Transmission Company began unscheduled maintenance on
Tuesday, July 3, at one of the two compressors at the Tennessee Carnes
interconnect. During the maintenance,
which is expected to last through Friday, July 6, 30,000 MMBtu per day is being
scheduled at the interconnect. During
normal operations, Florida Gas Transmission schedules up to 60,000 MMBtu per
day there. | ||||||||||||||||||||||||||||||||||||||||||
http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp | ||||||||||||||||||||||||||||||||||||||||||