Expectations for spring run-off in the Pacific Northwest continue to point to boosted hydroelectric generation, lessening gas flows to power generation and helping soften nationwide demand. Meanwhile, warmer weather during the third week of February eased heating load demand just as the remediation of production freeze-offs helped to bolster daily production. As a result, Henry Hub spot prices dropped below $3.90 per MMBtu, down $0.64 from January 3, 2011. What does this mean?
The national supply picture remains robust and the interplay between strong domestic production, flexible Canadian imports, record levels of working gas in storage to begin the winter heating season, and incremental LNG imports have steadily met demand needs this winter.
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