Natural Gas Prices
January 18, 2012 by staff
Natural Gas Prices, Crank up the thermostat, or better yet, pocket the cash you’re about to save. Natural gas prices are approaching their lowest levels in a decade because of mild weather and enormous production.
Natural gas futures plunged 6.8 percent Tuesday as forecasts of warmer weather have eroded demand just as production is ramping up from new resources such as Pennsylvania’s Marcellus Shale.
The price for February delivery closed Tuesday at $2.49 per million British thermal units (about a thousand cubic feet), down from $3 at the end of December and $4.50 a year ago.
There’s so much natural gas in storage that spot prices of $1 are likely in late February, according to a Bentek Energy report quoted Tuesday in Gas Business Briefing, a trade publication.
That’s good news for consumers – half the nation’s homes are heated with natural gas, and low gas prices also depress electricity prices. Industrial users who consume natural gas both as fuel and as a raw material for plastics and fertilizer also get a break.
But the glut of gas has some Pennsylvania natural gas producers worried that drilling will slow down because of the oversupply.
Louis D’Amico, president of the Pennsylvania Independent Oil and Gas Association, said that conventional gas-well drilling had virtually ceased because of low prices, and that bigger Marcellus Shale operations may start to slow until gas prices recover.
“These gas prices are a real heartache for conventional drilling in Pennsylvania,” D’Amico said. Conventional drilling of shallow, vertical wells tends to be dominated by family-owned operators.
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