Why your natural gas bills have soared this winter

Traders take prices on roller-coaster ride

Once considered dull and predictable, the market for natural gas has become the hottest around, sparking controversy as sky-high heating bills arrive in the midst of some of the wildest commodity trading ever.

Natural gas prices more than doubled through most of last year, only to plunge 44 percent in the past few weeks. A comparable move in the stock market would have propelled the Dow Jones industrial average from its mid-10,000 level a year ago to well past 20,000, then down to 13,000 again.

Instead, the Dow has risen a mere 3.2 percent in the past 12 months, sending traders in search of action piling into the market for natural gas. The resulting roller-coaster ride promises to continue into the spring.

Home heating bills rarely move in lock step with commodity markets, since many utilities smooth the ups and downs by averaging gas charges over time and hedging their exposure. But some critics believe the boom in trading has raised the cost of a basic necessity far past the point that fundamental factors such as the weather alone would justify.

Chicago Tribune