What’s Up with Natural Gas Prices?
What’s up with all the news lately on Natural gas? Quite simply, Natural gas prices have been consistently going down while gasoline prices remain at $90-100 per barrel. It isn’t too hard for the consumer to figure out why.
1. Consumption: Consumption has grown 21% in the electric power sector, while the commercial and residential sectors have decreased in consumption, due in part to the recent warm winter. Overall, there have been small but steady gains in consumption year over year.
Source: EIA (Energy Information Administration)
2. Production: Meanwhile, production has grown 8 percent in 2011 with increased shale gas production (specifically in the Marcelus Shale area), with continued increases in US production into 2012. Nevertheless, total production is forecasted to stay constant for the foreseeable future.
Source: EIA (Energy Information Administration)
3. Inventories: What has really made prices high are record inventories since the beginning of this year with the mild winter across the US. The inventories will reach record highs in October 2012, and continue to remain high through 2013. In fact, reports are we might run out of storage at the current rate of production.
Source: EIA (Energy Information Administration)
4. This basic case in supply and demand has translated into record low prices, the lowest since March 1999. The price of natural gas futures is expected to remain stable, or slowly increase.
Source: EIA (Energy Information Administration)
Because of these plunging prices, Alphabuyer has opted to negotiate for a variable rate. We will keep you updated if prices continue to rise and we negotiate for a fixed price contract. Meanwhile, read more about switching your natural gas supplier at the Alphabuyer website: http://www.alphabuyer.com/knowledgebase/about-switching-energy-suppliers/how-read-your-natural-gas-bill/
Don’t currently have natural gas? Stay tuned for rebates you can take advantage of before the winter sets in!
