Natural gas price advances as autumn arrives

Natural gas prices in the US surpassed the US$4 market once again despite continued strong production and negative consumption fundamentals.

At NYMEX the October 2011 contract gained US¢9.9/mBtu to close at US$4.039/mBtu over the week.

At Henry Hub the price fluctuated in a similar fashion, closing the week at US$4.01/mBtu, up US¢5 on 14 September.

Gas consumption fell slightly as the country experienced more gentle autumn temperatures. The decline was particularly noted in the power sector with a 4.1% contraction, while the residential/commercial sector noted a 0.2% fall and the industrial sector 0.1%.

On the supply side, Baker Hughes reported a fall in natural gas rotary rig count by 3 to 892 active units, while oil-directed rigs were down 7, at 1057. However, overall gas supply was up by 3.3%. Domestic weekly dry gas production averaged 62.1bnft3 per day, reaching a surplus of 7.5% over last year’s levels.

In its Weekly Natural Gas Storage Report, the US Energy Information Administration noted a net rise of 87bnft3 in working natural gas in storage, leaving the total figure at 3112bnft3 on 9 September.