NYMEX FUTURES PRICING (1/8/08)
Feb 08 $7.879
Feb 07 closed @ $6.917
NYMEX 1 year strip (Feb 08-Jan 09) $8.20
Actual NYMEX strip (Feb 07-Jan 08) $6.97
Winter NYMEX (Feb-Mar 08) $7.88
Actual NYMEX strip (Feb-Mar 07 $7.23
The prices stated above are in MMBtu and are the simple weighted averages of the term stated, your price could very on usage and the months of those usages.
STORAGE REPORT
This week’s EIA storage report for the week ending December 28, 2007:
This week’s withdrawal of: 87 Bcf
Leaving this week’s balance at: 2921 Bcf
This week’s balance last year: 3008Bcf
This week’s balance, 5-yr average: 2699 Bcf
According to EIA’s data, storage inventories are approx 8.2% above the 5-year average inventory level for this report week. Working gas in storage is well above the 5-year average for this time year, indicating a ready supply source to meet peak demand as the winter heating season progresses.
THOUGHTS ON THE MARKET
The year-on-year storage deficit ballooned for the second consecutive week due to the exceptionally warm weather pattern that was in place across the US at the end of December. And the mild conditions are expected to continue well into January, which should keep storage withdrawals relatively low.
Natural gas futures were relatively flat throughout 2007, with the opening 12-month NYMEX strip at $7.07. Short-term supply and demand have been favorable with very moderate weather, little storm activity and record storage levels. There are expectations of a warm winter and possibly lower prices, but it is hard to imagine that prices do not already reflect the current bearish outlook, and almost any unexpected news could send prices higher. Weather and the economy will drive shorter term prices. Crude oil traded to $100/bbl for the first time last week – actually several times.
