Since the beginning of 2014, natural gas prices have averaged $4.48 million British thermal units (or MMBtu). This is significantly lower than the record high of ~$13.5 per MMBtu seen in March 2008.
Natural gas futures prices fell sharply last week to settle at ~$3.95/Btu. This decline was primarily due to a larger than expected increase in natural gas stockpiles.
On Thursday, May 8, 2014, the EIA reported that natural gas inventories increased by 74 bcf (billions of cubic feet) for the week ended May 2, bringing current inventories to 1,055 bcf.
Despite a colder-than-normal week, the onset of spring and the end of cold weather weighed on natural gas prices. The front month natural gas contract closed at $4.31 per MMBtu last week.
On February 27, 2014, the EIA reported that natural gas inventories decreased by 95 bcf (billions of cubic feet) for the week ended February 21, bringing current inventories to 1,348 bcf.
Natural gas traded up by more than 9% on the week due to a bullish inventory report and cold weather. Natural gas has been trading at low levels over the past few years.
Natural gas prices are especially affected during the winter. Cold weather has been a major factor in the natural gas price rally over the past few weeks.
This past week, natural gas prices decreased by $0.25 per MMBtu. Natural gas prices remain low in a long term perspective despite last week’s great slip.
Last week’s weather was slightly milder than normal, which is a negative for natural gas prices as less of the commodity is needed to generate power for cooling devices.
