NEWS
US natural gas prices up; Henry Hub at $8.75
Washington, Aug 4 (LNG journal)
- US natural gas spot prices reached their highest since February 2003 this week because of high demand for power to run air-conditioning and near-record high crude oil prices, the US Department of energy said in its weekly natural gas report.
The benchmark gas price at Henry Hub, Louisiana , increased over the week by $1.25 per one million British thermal units (mmBtu), or about 17 percent, to $8.75. In the US market, liquefied natural gas prices are linked to Henry Hub prices.
On the New York Mercantile Exchange, the price of the gas futures contract for September delivery at the Henry Hub moved higher by about 76 cents per mmBtu to settle at $8.351. NYMEX natural Gas Futures for September delivery closed up $0.120 on Thursday at $8.471 per mmBtu
Natural gas in US storage was 2,420 billion cubic feet (Bcf) as of July 29, which is 7.6 percent higher than the five-year average. However, the hot temperatures throughout the Lower 48 States have slowed net injections in the past several weeks.
The spot price for West Texas Intermediate crude has increased $1.64 per barrel, or about 3 percent, since July 27 to trade at $60.76 per barrel or $10.48 per mmBtu.
The scorching heat has lifted demand for power generators to meet cooling demand across the country. The price increases were widespread, with prices at all reporting market locations increasing by $0.94 per mmBtu or more, the DoE said.
The Henry Hub price has risen in seven consecutive trading sessions, including increases of 25 cents per MMBtu or more in the last three days, ending the week at $8.75 per mmBtu, a two-and-a-half year high.
Other trading locations in producing areas along the Gulf Coast and in West Texas registered similar increases from $1.03 to $1.36 per mmBtu.Prices in the Northeast gained an average of $1.46 per mmBtu. The price for gas off Transcontinental Gas Pipe Line into New York City increased $1.62 per mmBtu to $9.74, almost a $1-premium to the Henry Hub price.
Prices increased significantly in the Rockies and the West Coast as well, albeit slightly less so than in the East. The price at the Southern California border increased $1.04 per mmBtu, or 16 percent, to $7.61. Trading locations in the Rockies registered an average increase of $1.03 per mmBtu to trade at an average of $7.22, the DoE said.
