Natural Gas Supply, Demand and Pricing

In late November 2005, about six weeks ago, EnergyPulse published the original version of this article on near-term price issues in the natural gas markets.

The key claim made at that time was that unless the weather got very cold, very fast and stayed that way for a considerable part of the heating season, natural gas prices were likely to drop 20-30% relative to oil prices in short order. At the time, oil was in the mid to upper $50/bbl. range and gas was in the $11-12/mmBtu range. Cold weather did arrive in early December but then left as fast as it came. The brief price spike to $15/mmBtu on that cold snap is long past. Now that it appears that natural gas inventories are adequate for the heating season, the unusual price signals from the natural gas markets have disappeared and prices have dropped as predicted.

The return of the natural gas markets to more normal pricing can be seen in multiple dimensions.

EnergyPulse