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Business/Finance See other Business/Finance Articles Title: Natural gas down 29 pct in a month Yahoo... NEW YORK (AP) — Natural gas, the nation's most prevalent heating fuel, is getting cheaper just as winter is arriving because of mild temperatures and plentiful supplies. The price of natural gas has dropped 29 percent in a month, to $3.17 per 1,000 cubic feet on Tuesday from nearly $4.50 in late November. That's a steep drop even for a fuel notorious for volatile price swings. The lower prices are expected to linger and could reduce electricity prices and heating bills in the coming months. Natural gas is used by half of the nation's households for heating and to generate 26 percent of the nation's electricity. Natural gas often rises as winter weather approaches, and a frigid November sent the price higher. But December warmed up, and temperatures for the rest of the winter are expected to be close to normal. Bob Brackett, an analyst at Bernstein Research, wrote in a recent note to investors that he expects natural gas to average "in the low 3's" into the spring, and a warm winter could push the price below $3.00. Last year at this time natural gas was near $4.50 and it reached as high as $6.15 in February after unusually cold weather gripped the eastern half of the country and stuck around for weeks. Prices in some locations averaged double or triple that amount as pipelines struggled to carry all the gas that was needed. Because of the way natural gas and electric utilities are regulated, customers won't likely see the recent drop reflected in their bills right away. Many will instead see higher prices as a result of last year's price spike. But the lower market prices could at least slow the rise in retail prices and perhaps reverse it if the low prices last. Conditions look good for low prices throughout the spring. After that, though, prices could head back up, analysts say. One-fifth of the nation's natural gas production is from gas found when drilling for oil, so-called "associated gas." A drop in the price of oil is forcing drillers to cut back, and that may slow the growth in production of associated gas. Also, in April of next year an Environmental Protection Agency rule governing emissions of mercury and other toxic chemicals goes into effect. That will force electric utilities to reduce their use of coal, the chief source of those emissions, and turn instead to natural gas. And later next year the first of several new liquefied natural gas export terminals are expected to start up, further increasing natural gas demand. Brackett expects natural gas prices to increase after the second quarter and average $4 per 1,000 cubic feet for the year. Tom Pugh, an analyst at Capital Economics, thinks the gas price could reach $6 by the end of 2016 as power generation and exports boost demand. That assumes normal weather, of course. Another strong blast of arctic air could bring higher prices much sooner. "A resurgence in cold weather, and the resultant jump in demand, could still lead to large price spikes during January and February," Pugh wrote in a research note Tuesday. Jonathan Fahey can be reached at twitter.com/JonathanFahey . Poster Comment: mad max Producers should not be allowed to flare natural gas. The well should be shut in until the gas can be utilized correctly or re-injected. I've worked in the business and this is a possible. One of these days we will regret wasting this valuable resource 9-2 Charles Bruce suggested conserving more when costs are down to get used to it. doesn't work that way. Example is the drought here in Ca. Its been in the news that customers who reduced their usage before the drought are being hit with penalties because they can't meet their city's 20% reduction in use. Why? they already reduced as much as they could. Now compared to their neighbors, they have to PAY MORE. What do you think happened in the 70's when utilities where pushing all electric homes and giving rebates if you built new or switched? Right, 10 years later you where getting charged more because it cost them more to produce the electric and all the people using it caused the price to go up. Made the gas cheaper compared to the electric to heat the house. Watch, people switching from fuel oil and propane to gas because its cheaper. When a lot more people and business use it will drive the cost up. 3 RobertFree Too bad us consumers won't see that. I'm locked into a 12 month contract. The shame of it is that my bill will be $30 but only $4 of it is gas. The service charge from the reseller is $6 and $20 is the charge from AGL for using their pipe.5 [John] I've been following NatGas for about 4 years now and I can tell you this is most unusual. NatGas pricing is extremely volatile. I don't believe it will stay below $4.00 for long, just until the next polar vortex. One thing you can bet on is after the LNG Export Facilities come on line you'll never see NatGas below $4.00 ever again. 5 Bob All utilities and other big users have contracts to buy at a fixed price. This way they can budget their expenses and have no upside risk. For this reason, lower prices are not likely to affect the end users until the next contract. 3 elf I am a 1/16 mineral rights owner of a 128 acre parcel in N.W.PA. Currently only 2 wells producing. Since 2009 our checks have dropped from over $400 per month down to $40. Our driller based in Cleveland Ohio who pays the royalties. Just told me personally on Monday that the buyer cannot pay what is due. They are now 2 months behind on the payments. Even though the price has been steady we the rites owners a getting raked. 3-1 Post Comment Private Reply Ignore Thread
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