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Natural Gas Weekly Update

for week ending May 8, 2013   |  Release date:  May 9, 2013   |  Next release:  May 16, 2013   |   Previous weeks

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

In the News:

LNG volumes, on average, traveled around 60 percent further in 2012 than in 1993

Growing average distances travelled by liquefied natural gas (LNG) volumes reflect structural changes in LNG markets. Over time, LNG has become more of a global commodity. In 1993, around 70 percent of total global LNG trade moved from an Asia-Pacific exporter to an Asia-Pacific importer, a relatively short journey. Early data for 2012, shows that this intra Asia-Pacific trade fell to under a third of total global LNG trade. As LNG trade has become more diverse and disperse, the average distance travelled by a billion cubic feet (Bcf) of LNG (a Bcf of gaseous natural gas, converted into LNG) has increased.

Growing LNG shipping distances also reflect the growth of LNG exports from the Middle East. Long-time Middle East exporters, Oman and Abu Dhabi in the United Arab Emirates, have sent and continue to send most of their gas to Asia-Pacific customers, a relatively long journey. However, Qatar, which started exporting LNG in 1997, has accounted for more than three-quarters of the growth of current Middle East exports over 1993 levels, and Qatar has a more diverse customer base, including relatively nearby customers in Europe and India. Although this has helped moderate growth in the average distance travelled by a Bcf of LNG exported from the Middle East, currently more than a third of Qatari LNG and around half of Middle East LNG still makes the long journey to Asia-Pacific customers. Thus as Middle East LNG exports have grown, so too has the average distance traveled by a Bcf of LNG exported globally.

To a lesser extent, growing average global distances reflect growing, but still relatively small, volumes of LNG that travel unusually long distances (more than 9000 nautical miles or more than twice the 2012 global average). These trades generally reflect spot or short-term purchases, not long-term contracts. In 2007 and 2012, LNG imports to Japan accounted for more than half of all LNG travelling such long-distances. This occurred as Japan reached out further from its shores to pull in extra LNG to make up for nuclear shutdowns in the wake of the 2007 Chuetsu earthquake and the 2011 Tohoku earthquake and tsunami.

Overview:

(For the Week Ending Wednesday, May 8, 2013)

  • Both spot and futures prices posted declines this report week (Wednesday, May 1 – Wednesday, May 8). The Henry Hub spot price decreased from $4.30 per million British thermal units (MMBtu) last Wednesday to $3.86 per MMBtu yesterday. Most price points across the country experienced similar declines.
  • The June 2013 New York Mercantile Exchange (Nymex) contract also declined, from $4.326 per MMBtu last Wednesday to close at $3.978 per MMBtu yesterday.
  • Working natural gas in storage increased last week to 1,865 Bcf as of Friday, May 3, according to EIA's Weekly Natural Gas Storage Report (WNGSR). An implied storage injection of 88 Bcf for the week put storage levels 737 Bcf below year-ago levels, and 99 Bcf below the 5-year average.
  • The Baker Hughes Incorporated natural gas rotary rig count decreased by 12 units, from 366 to 354 as of Friday, May 3. The average oil rig count rose by 22 units to 1,403.

more summary data

Prices:

Nymex futures prices as well as spot prices across the country declined for the report week. The Henry Hub price declined by $0.44 per MMBtu over the report week to close at $3.86 per MMBtu yesterday. Most of this decline occurred during trading on Friday, when prices closed $0.31 per MMBtu lower than the prior day's close. The Henry Hub price continued this downward trend with small daily declines through the remainder of the report week. Most other major trading hubs also saw similar price declines of around $0.40 per MMBtu. The near-month Nymex price fell by $0.348 per MMBtu over the report period, from $4.326 per MMBtu last Wednesday to $3.978 per MMBtu yesterday. The 12-Month Strip (the average of June 2013 to May 2014 contracts) experienced a slightly smaller week-on-week decline, decreasing by $0.286 per MMBtu and ending the week at $4.173 per MMBtu.

Total demand decreased moderately for the report week. According to BENTEK Energy Services LLC (Bentek) estimates, overall natural gas consumption in the United States decreased by 3.2 percent. The overall decline was led by significantly lower natural gas consumption in the power sector, down 7.2 percent versus the previous week. Power burn declined in the Southeast region by 9.4 percent, in the Southwest region by 15.6 percent, in the Midwest region by 25.4 percent, and in Texas by 6.8 percent. During the current report week, much of the central and southern parts of the country experienced mild temperatures that were cooler than normal and cooler than the previous week. Power burn in other parts of the country was up slightly. Exports to Mexico grew 12.4 percent week-over-week and are 32.0 percent higher than the same week last year.

Total supply for the report week was down slightly. Bentek estimates that supply was down slightly for the report period. U.S. gross and dry natural gas production both declined by 0.5 percent week-on-week, following last week's 0.3 percent decline. Gross and dry gas production for the week are still 2.4 percent above last year's level. Canadian imports were up 1.9 percent, with an 11.3 percent increase in imports to the Midwest, eclipsing small declines in net imports into the West and Northeast. Net imports into the Northeast, which were near zero last report week, fell slightly this week to become small net exports to Canada, according to Bentek.

more price data

Storage

Working natural gas in storage increased to 1,865 Bcf as of Friday, May 3, according to EIA's WNGSR. This represents an implied net injection of 88 Bcf from the previous week. Both the 5-year average and year-ago stock changes for the week were implied net injections of 69 Bcf and 30 Bcf, respectively. Inventories are currently 737 Bcf (28.3 percent) less than last year at this time and 99 Bcf (5.0 percent) below the 5-year average of 1,964 Bcf.

All three storage regions posted increases this week. Inventories in the East, West, and Producing regions increased by 52 Bcf (the 5-year average net injection is 41 Bcf), 5 Bcf (the 5-year average net injection is 9 Bcf), and 31 Bcf (the 5-year average net injection is 19 Bcf), respectively. In the Producing region, working natural gas inventories increased 14 Bcf (7.1 percent) in salt cavern facilities and increased 17 Bcf (3.2 percent) in nonsalt cavern facilities.

Temperatures during the storage report week were 2.1 degrees warmer than the 30-year normal temperature and 1.7 degrees warmer than the same period last year. Temperatures in the Lower 48 states averaged 59.6 degrees, compared to 57.9 degrees last year and the 30-year normal of 57.4 degrees. While overall temperatures were a few degrees warmer than normal, temperatures varied somewhat across Census divisions. The Pacific Census division in the West and the East North Central Census division in the Midwest were relatively warm, averaging 5.4 and 4.7 degrees warmer, respectively, than the 30-year normal. In the South, the South Atlantic Census division was relatively cool, averaging 1.4 degrees cooler than the 30-year normal. Heating degree-days nationwide were 23.1 percent below normal and 25.4 percent below last year.

more storage data

See also:



Natural Gas Spot Prices
Spot Prices ($/MMBtu)
Thu,
02-May
Fri,
03-May
Mon,
06-May
Tue,
07-May
Wed,
08-May
Henry Hub
4.28
3.97
3.93
3.88
3.86
New York
4.40
4.04
4.06
4.04
4.04
Chicago
4.41
4.02
4.00
4.00
4.01
Cal. Comp. Avg,*
4.30
3.96
3.95
3.93
3.93
Futures ($/MMBtu)
June Contract
4.025
4.041
4.011
3.920
3.978
July Contract
4.077
4.093
4.064
3.974
4.030
*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: (5/1/13 - 5/8/13)
Percent change for week compared with:
 
last year
last week
Gross Production
2.41%
-0.51%
Dry Production
2.39%
-0.51%
Canadian Imports
1.11%
1.91%
      West (Net)
14.88%
-1.95%
      MidWest (Net)
14.04%
11.27%
      Northeast (Net)
-122.46%
N/A
LNG Imports
-51.59%
-0.08%
Total Supply
1.99%
-0.34%
Source: BENTEK Energy LLC
U.S. Consumption - Gas Week: (5/1/13 - 5/8/13)
Percent change for week compared with:
 
last year
last week
U.S. Consumption
-8.49%
-3.16%
Power
-34.71%
-7.17%
Industrial
3.49%
-0.28%
Residential/Commercial
24.46%
-2.12%
Total Demand
-7.59%
-2.73%
Source: BENTEK Energy LLC
Natural Gas Supply


Rigs
Fri, May 03, 2013
Change from
 
last week
last year
Oil Rigs
1,403
1.59%
3.54%
Natural Gas Rigs
354
-3.28%
-41.58%
Miscellaneous
7
0.00%
75.00%
Rig Numbers by Type
Fri, May 03, 2013
Change from
 
last week
last year
Vertical
475
0.85%
-17.10%
Horizontal
1,092
0.74%
-5.70%
Directional
197
-1.01%
-15.81%
Source: Baker Hughes Inc.


Working Gas in Underground Storage
Stocks
billion cubic feet (bcf)
Region
5/3/13
4/26/13
change
East
756
704
52
West
344
339
5
Producing
765
734
31
Total
1,865
1,777
88
Source: U.S. Energy Information Administration
Working Gas in Underground Storage
Historical Comparisons
Year ago
(5/3/12)
5-year average
(2008-2012)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,186
-36.3
865
-12.6
West
378
-9.0
294
17.0
Producing
1,038
-26.3
805
-5.0
Total
2,602
-28.3
1,964
-5.0
Source: U.S. Energy Information Administration


Temperature -- Heating & Cooling Degree Days (week ending May 02)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
87
-13
-40
0
0
0
Middle Atlantic
72
-10
-41
0
0
0
E N Central
56
-31
-47
4
2
4
W N Central
79
2
17
4
0
-2
South Atlantic
44
8
8
22
-2
-9
E S Central
35
2
24
11
0
-20
W S Central
14
4
14
36
2
-38
Mountain
74
-14
16
19
7
4
Pacific
16
-36
-23
7
2
7
United States
50
-15
-17
12
0
-5
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending May 02, 2013

Mean Temperature (F) 7-Day Mean ending May 02, 2013

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending May 02, 2013

Mean Temperature Anomaly (F) 7-Day Mean ending May 02, 2013

Source: NOAA/National Weather Service