The holidays contributed to lower natural gas prices since shortened work weeks reduced industrial demand for natural gas. For the week (Wednesday to Wednesday) on January 4, the spot price at the Henry Hub decreased 66 cents, or nearly seven percent, to $9.25 per million British thermal units (mmBtu). This Wednesday's price of $9.25 was $3.55, or 62 percent, above last year's level of $5.70. The remaining shut-in production in the Gulf of Mexico continues to be a factor in elevated price levels.
Shut-in natural gas production in the Gulf of Mexico was 1.879 billion cubic feet per day as of Thursday, January 5, from its level on the previous Thursday of 1.954 billion cubic feet per day.
The amount of natural gas in storage in the East Region decreased 1.2 percent to 1,520 billion cubic feet for the week ending December 30, which was 72 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 therm.