WASHINGTON — The Energy Information Administration (EIA), the government's energy statistical arm, is reporting a small glimmer of hope in a recent natural gas weekly update. While EIA’s short-term energy outlook projected big increases in the price of natural gas, natural gas spot prices decreased the week of July 30-Aug. 6, marking a fifth consecutive week of declines at many trading locations after the unprecedented run-up in prices earlier this year (see Natural Gas Prices Projected to Climb and Warmer Weather Triggers Latest Natural Gas Price Hike). During the report week, the Henry Hub spot price decreased $0.31 per million Btu (MMBtu) to $8.70.
At the New York Mercantile Exchange (NYMEX), prices for futures contracts were also lower relative to the previous week. After reaching a daily settlement high price for the week of $9.389 per MMBtu on Aug. 1, the price of the near-month contract (September 2008) on Aug. 4 decreased by $0.663 per MMBtu to $8.726 following forecasts of cooler weather for the Lower 48 States. On the week, the near-month contract decreased $0.475 per MMBtu in value, ending trading Aug. 6 at $8.773.
During the week ending Aug. 1, estimated net injections of natural gas into underground storage totaled 56 billion cubic feet (Bcf). Working gas in underground storage as of Aug. 1 was 2,517 Bcf, which is 0.2% below the five-year (2003-2007) average.
Recent price decreases also came as the threatening Tropical Storm Edouard failed to significantly interrupt supplies in the Gulf of Mexico. There is also an improved outlook for supplies, particularly because of reported increases in domestic production at unconventional fields such as the Barnett Shale in northeast Texas.