Chris McGill Natural Gas Market Indicators

Daily cash prices at Henry Hub have fallen and near-term futures have even slipped below $4 per MMBtu during the past month. With futures contracts for October 2011 through March 2012 spread between $3.95 and $4.35, markets appear to anticipate adequate natural gas supply and thus expect only modest upward pressure on prices. The U.S. supply portfolio, including domestic production, Canadian imports, and liquefied natural gas, should therefore be sufficient, in the collective view of the market, to meet the needs of peak winter heating season demand.

Although impactful to mid-Atlantic and northeastern states, storm-related supply disruptions to date in Gulf of Mexico supply area have been modest and do not seem to have an impact on nearterm storage injections, which are increasing as cooling loads decline. Compared to last year at this time, domestic dry gas production is up by more than 6 percent, led by shale-based production growth—shale gas now accounts for about 20 Bcf per day of domestic natural gas production.

Visit this link to download the full Natural Gas Market Indicators.Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

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