Prices began rising on Monday due in part to the continued reduction of natural gas production in the Gulf of Mexico resulting from Hurricane Katrina. Prices have remained below last Wednesday's price of $11.05. For the week (Wednesday to Wednesday), the spot price at the Henry Hub decreased 25 cents, or about 2 percent, to $10.80 per million British thermal units (mmBtu). The Henry Hub price was $5.65 above last year's level of $5.15.
The amount of natural gas in storage in the East Region increased 3.8% for the week ending September 9 to 1,601 billion cubic feet which was 30 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.
