US natural gas prices slip

US natural gas prices saw declining prices over the week ended 2 November with the Henry Hub benchmark falling from US$3.65/mBtu to US$3.39 WoW, according to the Energy Information Administration’s Weekly Gas Update.

At the NYMEX, the December 2011 contract also slipped – by 2.6 cents from US$3.775.mBtu to US$3.749 over the week while the November contract expired on October 26, losing 22 cents over its tenure as the near-month contract and finishing at US$3.524/mBtu.

However, due to colder temperatures in parts of the US, demand increased over the week with Bentek estimating a rise of 12.6%. Most of this was attributed to the residential and commercial sector, which posted an increase of over 30%. Power burn slipped modestly and the industrial sector posted an advance of 2.6%.

On the export side, shipments to Mexico gained slightly and average just over 1200mft3d.

Despite of higher demand, overall supply only edged up by 0.2% with dry gas production up 0.3% WoW and 7.8% YoY. Canadian imports rose by 1.6%, standing 2.3% above last year’s volumes.

Domestic supply was strengthened by a rise in working natural gas in storage – to 3794bnft3 on 28 October, implying a net injection of 78bnft3. However, inventories are 17bnft3 below their YoY levels, but 201bnft3 above the five-year average.