The Henry Hub day-ahead price reversed last week’s rebound to decline 17 cents (7.7 percent) over the week. Although there was a temporary halt in the decline on Monday, likely due to the colder weather, the Henry Hub spot price declined overall from $2.21 per MMBtu last Wednesday to $2.04 per MMBtu yesterday. Spot prices at most trading points across the country also increased on Monday, only to subsequently decline for the remainder of the week.
At the NYMEX, the April 2012 contract, which expired yesterday, declined from $2.360 per MMBtu last Wednesday to $2.191 per MMBtu yesterday, a decline of 16.9 cents (7.2 percent). The 12-Month Strip (average of the April 2012 through March 2013 contracts) also declined, losing 11.4 cents (3.9 percent) over the week to close at $2.809 per MMBtu. The May contract, which moves into the near-month position today, declined from $2.454 per MMBtu last Wednesday to $2.282 per MMBtu yesterday.
Prices declined at almost all downstream trading locations over the week as warmer-than-normal temperatures were experienced across most of the country. Monday was an exception to the otherwise steady decline, as prices rose generally across the board. Particularly high spot price increases were seen Monday in the Northeast and Southern California, as colder than normal temperatures began moving into these areas. The colder temperatures were short-lived, and prices declined again on Tuesday. Spot prices at the Algonquin Citygate trading point for delivery into Boston, started the week at $2.31 per MMBtu, declined to $2.18 per MMBtu on Friday, jumped to $2.85per MMBtu on Monday, and then fell back to close the report week at $2.59 per MMBtu (up 12.1 percent for the week). Following a similar pattern, the Southern California Border Average price began the week at $2.44 per MMBtu, declined to $2.20 per MMBtu on Friday, jumped to $2.44 per MMBtu on Monday, and subsequently retreated to close yesterday at $2.32 per MMBtu (down 4.9 percent over the week).
U.S. demand increased over the report week, with overall consumption increasing by over 10 percent on Monday from the previous day in response to the colder weather. Consumption remained elevated on Tuesday before falling off on Wednesday. According to estimates from Bentek,U.S. natural gas consumption increased by 2.4 percent from last week. The residential/commercial sector showed the highest increase, with a 10.4 percent gain over the report week. The industrial sector gained 1.3 percent, while the power sector posted a 3.2 percent decline.