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Thursday, September 16, 2010

EIA Natural Gas Weekly Update For Sept. 16th

Natural gas spot prices increased this report week (Wednesday to Wednesday, September 8–15), likely supported by demand in the electric power sector from late season heat and associated air-conditioning demand in much of the country. During the report week, the Henry Hub spot price increased by $0.25 per million Btu (MMBtu) to $4.06 per MMBtu.

At the New York Mercantile Exchange (NYMEX), the price of the October futures contract increased in 4 out of 5 trading days for a total gain during the report week of about $0.18 per MMBtu. The price of the near term contract remained just below $4 per MMBtu, closing yesterday at $3.995 per MMBtu.

During the week ending Friday, September 10, estimated net injections of natural gas into underground storage totaled 103 billion cubic feet (Bcf). Working natural gas in underground storage was 3,267 Bcf, which is 6.2 percent above the 5 year (2005-2009) average.

The West Texas Intermediate (WTI) crude oil spot price increased $1.27 per barrel during the report week. The WTI crude oil spot price averaged $75.92 per barrel yesterday, or $13.09 per MMBtu.

Although the hottest temperatures of the year are clearly over, consumption in the electric power sector remained strong this week as much of the country continued to experience warm weather and air-conditioning demand likely increased. Consumption in the electric power sector increased an estimated 2.3 percent in comparison with the previous week, while overall U.S. consumption was an estimated 2.0 percent higher, according to BENTEK Energy, LLC. Consumption in the industrial sector also increased an estimated 2.8 percent, chiefly as a result of the typical drop in demand the previous week because of the Labor Day holiday (which also likely affected week-to-week comparisons in electric power consumption). At the same time, U.S. production dipped this week by an estimated 1.5 percent, averaging 61.4 Bcf per day. Although domestic production clearly remains strong, this factor along with increased demand provided enough support to at least temporarily reverse a fairly steady decline in natural gas prices since mid-summer. The Henry Hub natural gas spot price increased in 4 out of the 5 trading days this report week for a net gain of $0.25 per MMBtu. The Henry Hub price averaged $4.06 per MMBtu on Wednesday, September 15, which was the first time this price has exceeded $4 per MMBtu since August 24.

For information on this weeks natural gas report visit the EIA website.


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