AGA reports gas supplies declined 158 bcf

The American Gas Association Wednesday reported natural gas supplies for the week ended Dec. 8 fell by 158 bcf to a total of 2,271 bcf. The January natural gas contract settled at $7.537/Mcf, down 0.608�, on the New York Mercantile Exchange on reports of a warming trend predicted for the weekend. For the sixth time in as many weeks, the NYMEX raised the margins on its Henry Hub natural gas contract at the close of business Wednesday.


The American Gas Association Wednesday reported natural gas supplies for the week ended Dec. 8 fell by 158 bcf to a total of 2,271 bcf.

The January natural gas contract settled at $7.537/Mcf, down 0.608�, on the New York Mercantile Exchange on reports of a warming trend predicted for the weekend. For the sixth time in as many weeks, the NYMEX raised the margins on its Henry Hub natural gas contract at the close of business Wednesday. Margins were raised to $14,000 from $12,000 for clearing members; to $15,400 from $13,200 for members; and to $18,900 from $16,200 for customers.

The drawdown from storage was about in line with consensus expectations, according to Marshall Adkins, director of research for Raymond James & Associates Inc., Houston. Adkins said the firm's gas research team is anticipating withdrawals reported next week to be "north" of the number reported Wednesday.

The AGA reported supplies are 588 bcf below the year-ago level. During the same period a year ago, supplies fell 73 bcf.

Gas supplies in storage declined 41 bcf in the producing region, 110 bcf in the consuming region east, and 7 bcf in the consuming region west. The drawdowns left the producing region 60% full, compared to 65% a week earlier; the consuming region west 62% full, compared to 65% a week earlier and 88% a year earlier.

The consuming region east was 75% full, compared to 81% the week before and 90% a year ago.

Analysts are predicting the US could end the winter season with record low amounts of gas in storage. Adkins says exceptionally warm winters the past four winters have masked the strong economic growth that has occurred in the US during the past 5 years.

He said gas prices remain in "uncharted territory. I don't think we have seen the high."

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