A brief overview of gas price developments, supply and demand and significant market movers.
On Tuesday, natural gas futures fell in New York for the second time in three days following forecasts of above-average temperatures.
Natural gas for December delivery fell 7.1 cents to settle at $3.719 per million British thermal units on the New York Mercantile Exchange. Futures are up 12 percent from a year ago.
“We’re probably going to get warmer weather down the road, and that’s keeping a lid on prices,” said Dominick Chirichella, senior partner at the Energy Management Institute, in comments to Bloomberg. “Futures are still holding up pretty well at these levels, though.”
Meanwhile, Citigroup upped its forecast for 2013 natural gas prices as a result of lower-than-expected stockpiles caused by power plants turning away from coal and toward gas.
Statoil confirmed that as part of the agreement it will deliver 1.5 trillion cubic feet (Tcf) of natural gas to Germany and other markets nearby.
BP’s (LSE:BP) BP Trinidad and Tobago (BPTT) unit discovered a significant gas deposit at the Savonette field. The find is located off the coast of Trinidad and has led the company to increase its estimate of resources at the site by 200 percent.
BP’s local unit stated that the Savonette-4 appraisal well spudded two gas-bearing reservoir intervals, raising the estimate of gas located there to 2 Tcf from 1 Tcf. That is BPTT’s largest find since 2005.
Fox Business News reported that Alexander Medvedev, deputy chairman of Gazprom, has defended the Russian company’s long-term contracts that are linked to the price of oil. The state-controlled natural gas giant is being investigated by the EU for alleged violations of antitrust rules. The article notes that it has been claimed the company adjusted contracts for some of its European clients, “but has insisted on keeping natural gas prices linked to the oil price.”
Growing US shale gas production has resulted in billions of dollars in savings for consumers; however, the impact has been more subdued in Canada, according to reports released by TD Bank.
The reports note that residential consumers in the US will save around $75 billion in home heating and electricity costs in 2013.
In Canada, TD notes that the cost of gas for home heating over the past year is at a 10-year low.
“While Canadians are saving money, in terms of an overall household budget, it’s not a huge amount,” said economist Leslie Preston in an interview with The Canadian Press.