The aftermath of Hurricane Katrina and the approach of Hurricane Rita have applied upward pressure
on prices as gas production in the Gulf of Mexico continues to be disrupted. Prices
continued to climb from last week with only a slight pause on Friday. For the week
(Wednesday to Wednesday), the spot price at the Henry Hub
surged $3.45, or about 32 percent, to $14.25 per million British thermal
units (mmBtu). The Henry Hub price was $8.82 above last year's level of $5.43.
The amount of natural gas in storage in the East Region increased 3.1% for the week ending September 16 to
1,651 billion cubic feet which was 28 billion cubic feet above the 5-year average. Nebraska is a part of
the East Region (see map) which
is a major natural gas consumer, particularly in the residential and commercial
sectors. The industrial sector, which includes agriculture, is also a major consumer
in this state. Most of the gas is supplied from the Producing
Region with a fair amount imported from Canada. The Henry Hub in southern Louisiana is a major market center
with interconnections for many of the pipelines that transport U.S.-produced gas to the East Region. Furthermore,
the Henry Hub is the preferred reference point for prices for most of the domestic gas destined for the East.
Therefore, market conditions and developments in the East Region and price movements and trends at the Henry Hub
are usually highly correlated.
Notes: An archive is
available. Divide the price by ten (10) to obtain the price per hundred cubic feet
(ccf) or the approximate price per