Natural gas gross withdrawals, as reported by the U.S. Energy Information Administration’s (EIA) 914 survey, declined by 0.6 percent in the lower 48 States in February, the most recent month for which data are available. Gross withdrawals in Louisiana fell by 4.8 percent, or about 420 million cubic feet (MMcf) per day. This is the third consecutive month of decline in Louisiana. Withdrawals in Wyoming also fell, by 3.5 percent, about 230 MMcf per day.
Gains in other areas of the lower 48 States offset most of the declines. Withdrawals in the category for “other states,” which includes the states in the Marcellus Shale, grew by 260 MMcf per day, or 1.2 percent. EIA also noted that new wells in Colorado contributed to the increase in the “other states” category.
At the NYMEX, the June 2012 contract rose from $2.170 per MMBtu last Wednesday to $2.253 per MMBtu yesterday, an increase of 8.3 cents per MMBtu (3.8 percent) over the period. The June 2012 contract led the upturn in the futures market with an 11.5 percent rally over three days before giving back 5.0 percent yesterday on forecasts of more moderate weather. The 3-Month Strip (average of June-July-August contracts) followed suit with a 16.9 cent per MMBtu gain for the week.
Movement in the Henry Hub day-ahead price reflected a widespread increase in market prices in this week’s cash market by rising 16.1 percent, from $1.99 per MMBtu the previous Wednesday to $2.31 per MMBtu yesterday. As the Spot Prices tab on the left shows, the Henry Hub cash price began a rebound on Monday, moving well above the $2.00 per MMBtu threshold. During the same period, numerous other spot market pricing points also added double-digit gains.
Nearly all downstream trading locations registered higher prices as consumption increased modestly this week. Spot prices at Transcontinental Pipeline’s Zone 6 trading point for delivery into New York City, which started the week at $2.18 per MMBtu, gained $0.40 per MMBtu over the week (Wednesday to Wednesday) to close at $2.58 per MMBtu (up 18.3 percent). Over the same period, the Chicago citygate spot price registered a 21-cent per MMBtu price gain (from $2.11 per MMBtu last Wednesday), ending the week at $2.32 per MMBtu (up 10.0 percent).
In the midst of seasonal temperatures throughout the more-populated regions over the past week, total consumption increased slightly. According to estimates from BENTEK Energy LLC (Bentek), domestic natural gas consumption rose by 0.6 percent from last week. The power sector led the increase, posting a 6.1 percent gain in natural gas used for power burn. However, the residential/commercial sector showed a 4.8 percent week-over-week loss, while the industrial sector registered a 0.8 percent decrease.