Shut-ins from Tropical Storm Lee should have helped natural gas prices, but we still had a price decline over the past week. Prices have floated below $4 per mcf for several weeks now.
Natural gas storage levels are below the five year average, but we should continue to gain ground over the coming weeks. There just doesn’t seem to be much hope for gas prices in the near term.
The rig count did fall a bit, but we still have close to 900 rigs drilling for natural gas across the onshore US.
In the wake of Hurricane Irene (later downgraded to Tropical Storm Irene), Tropical Depression Lee moved into the Gulf, causing production shut-ins and across the board price increases last Thursday, September 1st. The Henry Hub spot price saw a 21 cent increase, jumping from $3.97 per million Btu (MMBtu) on Wednesday August 31st to $4.18 per MMBtu the following day. The impacts of the slow-moving storm were overshadowed, however, by significantly cooler weather, and prices declined steadily from their August 31 high over the next few days, closing at $3.93 per MMBtu on Tuesday. The threat of a new storm in the Gulf, Tropical Storm Nate, likely caused prices to rally slightly, with the Henry Hub spot price closing out the report week yesterday at $3.96 per MMBtu.
At the New York Mercantile Exchange, the October 2011 contract lost ground overall, falling from $4.054 per MMBtu last Wednesday to $3.940 this Wednesday.
Working natural gas in storage rose to 3,025 billion cubic feet (Bcf) as of Friday, September 2, according to EIA’s Weekly Natural Gas Storage Report (WNGSR).
The natural gas rotary rig count fell for the second week in a row, declining by 3 to 895 as of September 2, according to data reported by Baker Hughes Incorporated. The oil rig count broke its 19th consecutive week of increases, falling by 5 to 1,064.
Read the full weekly update at eia.gov