Natural Gas Prices Increase in First Half of 2013
Average spot natural gas prices at most major trading points increased 40 percent to 60 percent during the first half of 2013 compared to the same period in 2012, as demand for natural gas rose faster than increases in supply, according to the US Energy Information Administration.
Price increases were relatively uniform throughout the country, with the exception of New England and New York, where supply constraints caused spot prices to spike when demand peaked this winter.
Price differences between Henry Hub and most western trading hubs averaged less than 10 cents per million British thermal units (MMBtu). Natural gas spot prices at Henry Hub – a key benchmark and major trading location – averaged $3.75/MMBtu during the first half of 2013, up 57 percent from the $2.39/MMBtu average spot price for the first half of 2012. However, this year-over-year price increase principally reflected the extremely low prices in 2012.
Spot prices so far in 2013 are very similar to levels seen in 2009 to 2011 (see chart ).
Specific factors contributed to the return of natural gas prices closer to the $4.00 per MMBtu range. These include:
- Colder winter temperatures compared to a year ago, with declining power burn.
- Natural gas production gains slowed.
- Storage inventories decreased below five-year average levels.
Despite relatively high injections during May and June, storage levels have remained below their five-year average, supporting gas prices in the $4.00/MMBtu range. The Short-Term Energy Outlook projects that Lower 48 working inventories will reach 3,809 Bcf by the end of the injection season on October 31, 2013, with injection levels similar to those in 2008-11 but much higher than in 2012.
- Top 3 Reasons to Calculate Your Environmental Footprint
- Trends in Energy Management: Where Should Your Next Investment Be?
- Integrating sustainability into your ERM framework
- 2014 Environmental Leader Product and Project Awards
- Essential Guide to Lighting Retrofits and Upgrades
- Smart Companies Utilize Integrated Energy Solutions
- The Business Case for Corporate Sustainability Tools
- Guide to Energy, Carbon and Environmental Software
- The CFO and the Sustainability Reporting Chain
- Six Essential Steps to Drive Effective Energy Management
- Energy Efficiency Requires Engineering Efficiency
- Integrated Building Optimization: A Crucial Convergence of Demand-side and Supply-Side Energy Management Strategies
- Driving Productivity and Profit with Industrial Energy Management
- Energy Procurement in 2014: Products & Programs to Optimize Savings
- BUYING STRATEGIES IN A VOLATILE MARKET: What Businesses Need to Know about Retail Electricity Procurement