A brief overview of gas price developments, supply and demand, and significant market movers.
By Adam Currie — Exclusive to Gas Investing News
The recent downtrend in natural gas prices continued throughout the week with few exceptions. The Henry Hub price closed at $2.24 per MMBtu on March 7 – down 20 cents for the week.
At the New York Mercantile Exchange (NYMEX), the April 2012 natural gas contract fell 31 cents per MMBtu for the week to close at $2.302 per MMBtu.
Last week’s gas storage report from the US Energy Information Administration showed total domestic inventories fell by 80 billion cubic feet to 2.433 trillion cubic feet, still at record highs for this time of year, and more than 700 bcf, or 40 percent, above both last year and the five-year average level.
The natural gas rotary rig count, as reported March 2 by Baker Hughes Incorporated, fell for the eighth week in a row, decreasing by 19 to 691 active units, the lowest since August 2009.
Despite an increase in imports from Canada, a decrease in dry gas production and lower LNG send out led to a decline in overall supply over the week.
Most analysts, realizing that it will be difficult to balance the gas market without notable production cuts, do not expect any major slowdown in gas output until later this year.