Henry Hub Natural Gas Spot Prices 2005

Natural gas spot prices fell this week but remain near record highs.  Although Hurricane Rita was in a weaker condition than expected when she made landfall, rigs and platforms in the Gulf of Mexico were evacuated, and both offshore and onshore energy-related infrastructure sustained damage.  Shut-in natural gas production in the Gulf was at 77 percent of the daily gas production on Wednesday, September 28.

The Henry Hub has been shut down and under force majeure since Thursday, September 22.  Sabine Pipeline, its operator, reports that the Henry Hub has water damage and power outages.  The Henry Hub is a key trading location and the delivery point for NYMEX natural gas futures contracts.

Before Hurricane Rita's landfall, Henry Hub spot prices on Thursday and Friday (September 22 and 23) were at an all-time high at $15.27 per million British thermal units (mmBtu), which was $1.02 higher than Wednesday's price.  Price quotes were not available at the Henry Hub for this week, but trading at other Louisiana market locations fell an average of $1.35 to $13.45 per million British thermal units on the week (Wednesday to Wednesday).

The amount of natural gas in storage in the East Region increased 2.9% for the week ending September 23 to 1,698 billion cubic feet which was 23 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.

Sources:  Natural Gas Weekly Update.   Energy Information Administration, Washington, DC.  Nebraska Energy Office, Lincoln, NE.

Note:  NA = Not available.

This table was updated on September 30, 2005.  Typically, there is one week between updates.

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