An increase in natural gas prices was expected when the West Texas Intermediate (WTI) crude oil spot price increased over $52 and positioned itself to support higher natural gas prices, but then the crude oil spot price dropped sharply on May 11 to $50.39. Natural gas prices probably got their boost from cooler-than-normal weather, which may have spurred late-season heating demand. For the week (Wednesday to Wednesday), the spot price at the Henry Hub increased 14 cents per million British thermal units (mmBtu), or 2 percent, to $6.63. The Henry Hub price was about 18 percent below last month's high of $7.80 per mmBtu on April 4, but still 39 cents, or 6.3 percent, above last year's level of $6.24.
The amount of natural gas in storage in the East Region increased 4.3% for the week ending May 6 to 685 billion cubic feet which was 85 billion cubic feet above the 5-year average. Nebraska is a part of the East Region (see map) which is a major natural gas consumer, particularly in the residential and commercial sectors. The industrial sector, which includes agriculture, is also a major consumer in this state. Most of the gas is supplied from the Producing Region with a fair amount imported from Canada. The Henry Hub in southern Louisiana is a major market center with interconnections for many of the pipelines that transport U.S.-produced gas to the East Region. Furthermore, the Henry Hub is the preferred reference point for prices for most of the domestic gas destined for the East. Therefore, market conditions and developments in the East Region and price movements and trends at the Henry Hub are usually highly correlated.
Notes: An archive is available. Divide the price by ten (10) to obtain the price per hundred cubic feet (ccf) or the approximate price per therm.
