Hess - Click Here.

Natural Gas Prices Increase in First Half of 2013

Linda Hardesty

EIA chartAverage 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.



3 comments on “Natural Gas Prices Increase in First Half of 2013

  1. “Colder winter temperatures compared to a year ago”
    What happened to global warming. Temps a year ago were colder than the year before.
    50% of fraq wells run dry within 1st year of operation. Is it really worth it?
    Oh, I forgot, secret fraq fluid is clever way to dispose of toxic waste. How clever. Who drinks water anymore, anyway?

  2. Global warming is of course still with us (unfortunately). Despite colder wintertime temps over North America, the decadal global average temperatures are still on the increase. And the total heat content of the oceans is still increasing. And the seasonal artic ice melt is still getting worse. And sea levels are still on the rise. And… And… And…

  3. @CO2good,

    the colder winter is weather, not climate (although it may have a climate based cause).
    The colder winters are due to colder air being blown in from colder northern areas, instead of the normal winds from the west (in turn making arctic areas warmer still), not because the climate is cooling. It may be that climate change is causing changes in our weather patterns and we will get consistently cold winters in places, but that’s not evidence that global warming is no longer with us.

Leave a reply


*

Energy Management White Papers - Click Here.