Tuesday, July 22, 2014

NatGas Price Keeps Dropping

The Henry Hub spot price of natural gas dropped below the five year average this week for the first time since mid-January, hitting $3.84/MMcf yesterday.

Late summer typically sees gas prices drop, but the continued high injections into storage has probably accelerated this recent swoon.  Storage injections have stayed in the +100 Bcf/week range for several months, but the current level still lags the five year average by 727 Bcf.  While there is little chance that the current level will catch up to the average level before the end of the injection season in November, a warm winter will wipe out the deficit in short order and gas prices will be locked back in the 3's for a good long time.

No comments: