Natural gas has largest storage withdrawal on record

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Overview:

(For the Week Ending Wednesday, April 9, 2014)

  • Spot prices rose slightly at most hubs for the report week (Wednesday, April 2, to Wednesday, April 9) and went up significantly at the benchmark Henry Hub, following declines the previous week. The Henry Hub spot price rose from $4.35/MMBtu last Wednesday to $4.66/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the May 2014 contract increased from $4.364/MMBtu on Wednesday to $4.586/MMBtu yesterday.
  • Working natural gas in storage rose to 826 billion cubic feet (Bcf) as of Friday, April 4, according to the U.S. Energy Information Administration (EIA) Weekly Natural Gas Storage Report (WNGSR). A net storage injection of 4 Bcf for the week resulted in storage levels 50.7% below year-ago levels and 54.7% below the 5-year average.
  • The total rig count was 1,818 as of April 4, an increase of 9 from the previous week, according to data from Baker Hughes Inc. The natural gas rig count decreased by 2 rigs to 316, while the number of oil-directed rigs rose by 11 to 1,498. Since the beginning of 2014, the gas-directed rig count has decreased by 56, with the biggest declines at the Eagle Ford Shale in South Texas (-15), and the Woodford Shale in Oklahoma and Texas (--10). The oil-directed rig count increased by 120, with biggest increases at the Permian Basin in West Texas and eastern New Mexico (61), and the Eagle Ford (11).
  • A 2% rise in the price of propane, from $11.48/MMBtu to $11.71/MMBtu, caused the weekly average natural gas plant liquids composite price to increase for the second week in a row. The composite price rose this week (covering March 31 through April 4) by 0.2%, and is now at $9.94/MMBtu. The propane price increase alone drove up the composite price, as prices decreased for ethane (1.3%), butane (0.7%), isobutane (1.0%) and natural gasoline (0.7%).
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more summary data

Prices/Demand/Supply:

Henry Hub price rises. The Henry Hub spot price rose by 31 cents/MMBtu this week, to $4.66/MMBtu yesterday. Temperatures warmed this week in most of the United States, contributing to price increases that were less pronounced than those seen at Henry Hub. Prices rose slightly at most major markets, with the exception of Boston and Chicago, where spot prices decreased slightly.

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Nymex prices increase 22 cents. After decreasing slightly last week, the Nymex May contract rose this week, from $4.364/MMBtu on Wednesday, April 2, to $4.586/MMBtu yesterday. The 12-month strip (the 12 contracts between May 2014 and April 2015) rose slightly, from $4.454/MMBtu last Wednesday to $4.624/MMBtu yesterday.

Consumption decreases week over week. Warmer temperatures this week contributed to a 4.1% week-on-week decline in total consumption, from an average of 67.5 billion cubic feet per day (Bcf/d) last week to 64.8 Bcf/d this week. This was the second week in a row that consumption decreased, and the lowest weekly average since the beginning of November 2013. 

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