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Natural Gas Weekly Update

for Week Ending January 16, 2013   |  Release date:  January 17, 2013   |  Next release:  January 24, 2013   |   Previous weeks

JUMP TO: In The News | Overview | Prices/Supply/Demand | Storage

In the News:

The Year 2012 was Warmest on Record.

According to a recent report by the National Oceanic and Atmospheric Administration (NOAA), 2012 was the warmest year in the contiguous United States since recordkeeping began in 1895. The average temperature was 55.3 degrees, 3.2 degrees greater than the 20th century average and 1.0 degree greater than the previous record in 1998. The warm year was the result of the combination of a mild winter and a hot summer, and warmer than normal temperatures in every state, not just in isolated regions of the country.

The temperatures in 2012 affected natural gas consumption. Even with lower average natural gas prices, residential and commercial consumption in 2012 was lower than any of the previous 5 years with lower demand for heating. In the electric power sector, weather, relatively low natural gas prices, and a structural shift toward generating more electricity from natural gas-fired power plants contributed to increased natural gas consumption, which started early in 2012. Industrial consumption, which responds both to the economic environment and to weather, was slightly higher in 2012 than in each of the last five years.

Overview:

(For the Week Ending Wednesday, January 16, 2013)

  • Natural gas prices were up across the board for the report week (Wednesday to Wednesday). The Henry Hub closed at $3.43 per million British thermal unit (MMBtu) yesterday, up 29 cents for the week. Trading points in the Northeast saw the most substantial price jumps.
  • The January 2013 New York Mercantile Exchange (Nymex) contract increased by 32 cents, from $3.113 per MMBtu last Wednesday to close at $3.435 per MMBtu yesterday. The near-month Nymex price ended the week just one half cent per MMBtu above the Henry Hub price.
  • Working natural gas in storage declined last week to 3,168 billion cubic feet (Bcf) as of Friday, January 11, according to the U.S. Energy Information Administration's (EIA) Weekly Natural Gas Storage Report (WNGSR). An implied storage withdrawal of 148 Bcf for the week moved storage levels 147 Bcf below year-ago levels, and 316 Bcf above the 5-year average.
  • The Baker Hughes Incorporated natural gas rotary rig count fell by 5 units, from 439 to 434 as of Friday, January 11. The average oil rig count increased by 5 units, from 1,318 to 1,323. This is the first increase in the oil rig count since falling sharply through late December.

more summary data

Prices:

Natural gas prices are up at most market locations, increasing most significantly in the Northeast. Henry Hub increased from $3.14 per MMBtu last Wednesday to $3.43 yesterday, an increase of 29 cents per MMBtu, or 9 percent. Most trading points increased between 20 and 30 cents per MMBtu week-on-week, with the notable exception of the Northeast. Algonquin Citygate, serving Boston, jumped by $4.57 per MMBtu, an increase of 104 percent over prices at the start of the report period. Transco Zone 6 NY, serving New York City, saw a price increase of $2.59 per MMbtu, up 78 percent Wednesday to Wednesday. Temperatures in the Northeast fell precipitously Tuesday and yesterday, which were the days of the largest price increases. The Midcontinent and Northwest faced low temperatures across the whole report period.

The Nymex futures price rose week-on-week. The Nymex price rose 32 cents per MMBtu over the report period, from $3.113 per MMBtu last Wednesday to $3.435 per MMBtu yesterday. The near-month Nymex price closed just one half cent per MMBtu above the Henry Hub price yesterday. The 12-Month Strip (average of February 2013 to January 2014 contracts) also increased, rising 25 cents per MMBtu over the report period and ending the week at $3.654 per MMBtu. The 24-Month Strip is also trading below $4.00 per MMBtu, closing at $3.864 yesterday.

Total consumption for the report week was down. According to Bentek estimates, overall natural gas consumption for the nation fell by 2.2 percent. The residential/commercial sector, the biggest gas-consuming sector during the winter, consumed 5.4 percent less gas week-on-week. Industrial consumption was also down, falling by 1.6 percent. The decline in total natural gas consumption was partially mitigated by a 3.9 percent increase in natural gas consumed in the electric power sector. The Midcontinent, Southwest, and Pacific Northwest all faced colder temperatures week-on-week, and consumed 42.8 percent, 23.4 percent, and 44.8 percent more gas for electric generation, respectively. These regions are not large consumers of natural gas as a source for electricity, so these large percentages partially result from small base volumes. The Midcontinent and Pacific Northwest regions are not particularly reliant on natural gas as a source for electricity, so these percentages are relative to small bases. The Southeast, the biggest gas-consuming region for electric power, was unseasonably warm over the report week, and consumed 7.3 percent less gas for electric generation.

Total supply for the report week was down. Bentek estimates an overall supply decrease of 1.5 percent for the report period. U.S. gross and dry natural gas production were down 0.7 percent week-on-week and Canadian imports were down 9.3 percent. Imports fell most sharply in the Northeast, dropping by 34.4 percent. LNG imports, which are just a tiny fraction of overall supply, were also down by 8.8 percent.

more price data

Storage

Working natural gas in storage decreased to 3,168 Bcf as of Friday, January 11, according to EIA's WNGSR. This represents an implied net withdrawal of 148 Bcf from the previous week. This week's net withdrawal was 4 Bcf larger than the 5-year average net withdrawal of 144 Bcf, and 59 Bcf larger than last year's average net withdrawal of 89 Bcf. Inventories are currently 147 Bcf (4.4 percent) less than last year at this time and 316 Bcf (11.1 percent) greater than the 5-year average.

All three storage regions posted declines this week. Inventories in the East, West, and Producing regions decreased by 86 Bcf (the 5-year average net withdrawal is 85 Bcf), 23 Bcf (the 5-year average net withdrawal is 20 Bcf), and 39 Bcf (the 5-year average net withdrawal is 39 Bcf), respectively. In the Producing region, working natural gas inventories decreased 8 Bcf (2.8 percent) in salt cavern facilities and decreased 33 Bcf (3.7 percent) in nonsalt cavern facilities.

Temperatures during the storage report week were 4.0 degrees warmer than the 30-year normal temperature and 4.4 degrees cooler than the same period last year. Temperatures in the Lower 48 states averaged 37.1 degrees, compared to 41.6 degrees last year and the 30-year normal of 33.1 degrees. While overall temperatures were a few degrees warmer than normal, temperatures varied somewhat across Census divisions. In the Midwest, the West North Central and East North Central Census divisions were particularly warm, averaging 8.7 and 7.0 degrees warmer, respectively, than the 30-year normal. In the West, the Pacific and Mountain Census divisions were relatively cool, averaging 1.1 and 0.9 degrees cooler, respectively, than the 30-year normal. Heating degree-days nationwide were 12.4 percent below normal and 19.4 percent above last year.

more storage data

See also:



Natural Gas Spot Prices
Spot Prices ($/MMBtu)
Thu,
10-Jan
Fri,
11-Jan
Mon,
14-Jan
Tue,
15-Jan
Wed,
16-Jan
Henry Hub
3.08
3.18
3.38
3.40
3.43
New York
3.26
3.33
3.91
4.69
5.92
Chicago
3.20
3.30
3.55
3.52
3.56
Cal. Comp. Avg,*
3.38
3.51
3.69
3.62
3.64
Futures ($/MMBtu)
February Contract
3.193
3.327
3.373
3.455
3.435
March Contract
3.208
3.336
3.378
3.453
3.437
*Avg. of NGI's reported prices for: Malin, PG&E citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index
Natural Gas Futures Prices


U.S. Natural Gas Supply - Gas Week: (1/9/13 - 1/16/13)
Percent change for week compared with:
 
last year
last week
Gross Production
-1.51%
-0.74%
Dry Production
-1.50%
-0.74%
Canadian Imports
-7.07%
-9.30%
      West (Net)
11.28%
2.97%
      MidWest (Net)
11.99%
-0.47%
      Northeast (Net)
-41.64%
-34.43%
LNG Imports
-56.79%
-8.81%
Total Supply
-2.44%
-1.46%
Source: BENTEK Energy LLC
U.S. Consumption - Gas Week: (1/9/13 - 1/16/13)
Percent change for week compared with:
 
last year
last week
U.S. Consumption
-3.56%
-2.33%
Power
-5.67%
3.89%
Industrial
-0.96%
-1.58%
Residential/Commercial
-3.66%
-5.38%
Total Demand
-3.21%
-2.21%
Source: BENTEK Energy LLC
Natural Gas Supply


Rigs
Fri, January 11, 2013
Change from
 
last week
last year
Oil Rigs
1,323
0.38%
11.08%
Natural Gas Rigs
434
-1.14%
-45.13%
Miscellaneous
4
-20.00%
-20.00%
Rig Numbers by Type
Fri, January 11, 2013
Change from
 
last week
last year
Vertical
460
-4.17%
-24.96%
Horizontal
1,119
0.63%
-3.62%
Directional
182
7.06%
-14.55%
Source: Baker Hughes Inc.


Working Gas in Underground Storage
Stocks
billion cubic feet (bcf)
Region
1/11/13
1/4/13
change
East
1,600
1,686
-86
West
455
478
-23
Producing
1,113
1,152
-39
Total
3,168
3,316
-148
Source: U.S. Energy Information Administration
Working Gas in Underground Storage
Historical Comparisons
Year ago
(1/11/12)
5-year average
(2008-2012)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,710
-6.4
1,508
6.1
West
436
4.4
387
17.6
Producing
1,168
-4.7
957
16.3
Total
3,315
-4.4
2,852
11.1
Source: U.S. Energy Information Administration


Temperature -- Heating & Cooling Degree Days (week ending Jan 10)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
236
-35
1
0
0
0
Middle Atlantic
216
-43
-4
0
0
0
E N Central
245
-49
36
0
0
0
W N Central
256
-61
59
0
0
0
South Atlantic
153
-30
6
11
3
8
E S Central
161
-27
33
0
-2
0
W S Central
130
-12
43
1
-2
-1
Mountain
242
6
50
0
0
0
Pacific
133
8
50
0
0
0
United States
197
-28
32
2
0
1
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Jan 10, 2013

Mean Temperature (F) 7-Day Mean ending Jan 10, 2013

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Jan 10, 2013

Mean Temperature Anomaly (F) 7-Day Mean ending Jan 10, 2013

Source: NOAA/National Weather Service