Last Week Summary

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Natural Gas:

The NYMEX prompt-month contract increased $0.26 per million British thermal units (MMBtu) last week to $5.05/MMBtu on Friday. The November contract expired on Wednesday, and the December contract is now the prompt-month contract. The November contract traded as low as $4.23/MMBtu last week. The 12-month NYMEX strip price was down $0.18/MMBtu to $5.62/MMBtu.  Last week, the Henry Hub cash price decreased $0.77/MMBtu to $4.11/MMBtu.
Storage:

The Energy Information Administration (EIA) storage inventory for the week ending Oct. 23 rose by 25 billion cubic feet (Bcf) to a record 3.759 trillion cubic feet (Tcf). The build was slightly smaller than expected. The storage level is 414 Bcf above the five-year average and 373 Bcf more than the same period in 2008. There is only one more week left in the traditional injection season, but injections sometimes continue into November.
Weather:

This week, the western half of the U.S. should have warmer-than-normal weather and the eastern half of the U.S. should have cooler-than-normal weather. Most of the central region of the U.S. should have warmer-than-normal temperatures, and most the coastal regions of the U.S. should have normal temperatures in the six- to 10-day and the eight- to 14-day time periods.
Imports:

Send-out volumes last week from liquefied natural gas (LNG) terminals totaled about 1.2 billion cubic feet per day (Bcfd), which was 0.5 Bcfd more than a year ago. Canadian imports were 6.2 Bcfd, which was 1.6 Bcfd less than a year ago.
Exploration and production:

The total U.S. oil and gas rig count increased by 21 last week to 1,069 rigs. The gas rig count increased by three and stands at 728. The total rig count has increased by 193 rigs since the low of 876 on June 12. The Canadian rig count increased by five to 249.

The EIA reported that U.S. proved natural gas reserves increased by 2.9 percent in 2008 to an all-time high. It was the sixth annual increase. The increase was due to a 51 percent increase in shale gas reserves. Shale gas is now 13 percent of total U.S. natural gas reserves. In contrast, U.S. oil reserves declined 10.3 percent.
Electricity:

Electricity generation for the week ending Oct. 24 was 2 percent less than the prior week and 2.6 percent less than a year ago. Year-to-date electricity usage is 3.9 percent lower than last year.
Petroleum:

The NYMEX West Texas Intermediate (WTI) prompt-month contract settled at $77 per barrel (Bbl) on Friday, down $3.50/Bbl for the week because of a stronger dollar and concerns about future economic growth. The contract traded as high as $80.46/Bbl last week. The spread between the prompt-month contract and the 12th-month contract slightly widened during the week from $4.84/Bbl to $4.86/Bbl on Friday. Brent crude settled at $75.20/Bbl on Friday. U.S. retail gasoline prices were 6 cents higher last week at $2.70 per gallon.

For the week ending Oct. 23, crude oil inventories increased by 0.8 million barrels (MMBbls), distillate inventories decreased by 2.1 MMBbls, and gasoline inventories increased by 1.7 MMBbls. Gasoline inventories unexpectedly increased. U.S. refinery utilization increased 0.7 percent to 81.8 percent.

Compared to last year, the EIA estimates that the four-week rolling average U.S. gasoline demand was up 1.9 percent, distillate fuel demand was down 13.1 percent and jet fuel demand was down 5 percent. Total products supplied to the U.S. market were down by 3 percent compared to last year.

Iran announced that it would not ship its stockpile of nuclear fuel to Russia to be processed to make medical isotopes. Iran fears that Western countries will block the return of it nuclear inventory if it is sent out of the country.
Economy:

U.S. gross domestic product grew at a 3.5 percent annualized rate in the third quarter. It was the first quarterly growth after four consecutive quarters of declines. The growth rate was greater than expected because of the government stimulus for auto and home purchases.

Personal spending fell 0.5 percent from August to September. Wages and salaries in September fell 5.2 percent compared to a year ago. However, government transfer payments helped keep consumer income flat. Consumer confidence fell in October.

The Case-Shiller home price index for 20 major cities rose for the fourth straight month. Home prices are 11.3 percent lower on a year-over-year basis. The sale of new homes in September unexpectedly fell, but new home starts have risen for four of the last five months. Sales of existing homes spiked to a two-year high in September. Only 251,000 homes were for sale in September, the lowest number since 1982. The inventory of homes is 7.5 months at the current sales pace.

Durable goods orders rose in September. Inventories fell 1 percent in October to the lowest inventory-to-sales ratio in a year.

The Federal Reserve ended its $300 billion Treasury debt purchases program last week. The Federal Reserve will end its mortgage securities and agency debt purchases in the first quarter of 2010.