Natural Gas Prices Fall 80% to a 6 1/2 Year Low 14 comments
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With all of the attention recently on falling oil and gasoline prices, there hasn't been much attention on falling natural gas prices, which recently fell to levels not seen since early March of 2002, more than 6.5 years ago! Since the most recent peak in late June, natural gas prices have fallen by almost 80% (see chart above).
Bottom Line: Because of the significant decline in natural gas prices, we can expect lower electricity prices, and lower home heating costs this winter, and in fact it's already happening. From a USA Today story:
Here's a bright spot in an ailing economy: Electricity prices are falling in many areas.
The sharp drop in natural gas prices and, to a lesser extent, oil prices is slashing electric rates across big swaths of the USA. Utilities in the Northeast, Texas, Florida, the Mid-Atlantic and California rely heavily on natural-gas-fired power plants to generate electricity.
Natural gas prices have plummeted as the anemic economy has dampened consumption. Also, natural gas resources jumped this year as producers found ways to unearth fresh supplies embedded in shale rock.
Update: The prices in the chart are for "Natural Gas Wellhead Price West Texas (US$/MCF)" from Global Financial Data.
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This article has 14 comments:
Yes, NG to the rescue! It increasingly appears we will have ample domestic supplies for electricity AND as a replacement for a significant percentage of gasoline as a transportation fuel.
I believe we should proceed full speed ahead with WIND FARMS anyway, however. This new INFRASTRUCTURE will create jobs NOW, and owing to the looong lead times for nuclear reactors, will provide us much needed AFFORDABLE electricity in the future.
In "Fleeced," Dick Morris claims the U.S. has actually DOUBLED its number of domestic manufacturing jobs over the past two decades. Is this so, do you know?
Where are the manufacturing jobs? We are on our way to becoming a service economy. Look at England and you will see USA in 25 years.
On Nov 07 08:44 AM paulk8756 wrote:
> Mark,
>
> In "Fleeced," Dick Morris claims the U.S. has actually DOUBLED its
> number of domestic manufacturing jobs over the past two decades.
> Is this so, do you know?
> jack
No matter how weak the economy gets, the decrease in demand will not decrease the costs of distribution. At some point, future production will require higher prices.
Devon Energy's CEO was on CNBC a few weeks ago stating that low NG prices are causing him to reduce capex to such an extent that 2009's previously expected output would decrease 33%.
Pipelines from Canada deliver NG 24/7 to the US. Without that input there would not be a surplus in storage. Off hand, the US was importing something like 15% of its NG needs before the Anemic economy began.
When I read that Canada is stopping transmission into the US because we have an NG glut, then I will have to change my mind. Otherwise, IMHO, I have to diagree.
Name a few and the prices you would buy them at.
I will treasure that input.
I can't wait tio see the enviro jihadists go at each other in a civil war. One side on the water table issue, the other side on the NG carbon credit issue. This will be fun and somehow profitable.