NEWS
US natural gas futures fall; storage is high
London, Aug 19 (LNG journal)
London, Aug 19 (LNG journal) -- US natural gas futures fell on Friday below $9 per million British thermal units after the Department of Energy reported gas stocks at almost 6 percent above the five-year average inventory level.
The price of the New York Mercantile Exchange futures contract for September delivery at the Henry Hub in Louisiana was last at $8.98 per mmBtu in electronic Access trading. The NYMEX September contract had risen over most of the past week before edging down before the New York close on Thursday.
The NYMEX September contract had soared almost 32 US cents per mmBtu, or nearly 4 percent, since August 10, to $9.391 per mmBtu. Futures prices for the contracts from September 2005 through November 2005 then became backwardated.
In a backwardated market the price of spot gas is higher than that of future gas. In this case, the Henry Hub spot price on Wednesday was between 59 US cents and 21 US cents higher than the prices for futures contracts through to November.
"This likely reflects the effects of increased tightness in the natural gas spot market, owing to the continued warm temperatures in most regions and tightness in coal-fired and hydro-electric electricity supply," the US DoE said in its weekly natural gas analysis .
US natural gas spot prices, meanwhile, increased more than 50 US cents per mmBtu at virtually all market locations in the Lower 48 States, with increases exceeding $1 per mmBtu in the Northeast and Gulf of Mexico regions.
For the reporting week, prices at the Henry Hub increased $1.17 per mmBtu, or more than 13 percent, to $9.98 per mmBtu, the DoE said.
Natural gas in US storage was 2,515 billion cubic feet as of August 12, which is about 6 percent above the five-year average, the DoE said in its weekly inventory report.
The spot price for West Texas Intermediate (WTI) crude oil decreased $1.51 per barrel, or about 2 percent, on the week to $63.29 per barrel or in gas terms, $10.91 per mmBtu.
