US gas price paints mixed picture

The Henry Hub spot prices continued to fluctuate this week to settle at US$3.55/mBtu on 9 November, up by 16 cents from the US$3.39/mBtu posted a week earlier.

However, at NYMEX the price of the near-month (December 2011) natural gas futures contract slipped from US$3.749/mBtu to US$3.652/mBtu.

The eastern US registered warmer than average temperatures over the past week, translating into increased gas consumption for power burn in the North- and Southeast as well as the Midwest. In addition, gas use for commercial heating in the Rockies and California pushed up demand further although some of these gains were lost as the region experienced warmer temperatures towards the end of the week.

On the supply side, working natural gas in storage rose to 3831bnft3 on 4 November, according to the US Energy Information Administration’s Weekly Natural Gas Storage Report, while Baker Hughes reported a lower rotary rig count, down 27 to 907, effectively reversing the recent upward trend. Dry production was up about 0.4%