| Natural gas supply fears raise prices |
|
 Leanan writes: Natural gas prices have jumped 17% in two days, a chilling development for the millions of Americans who heat their homes with natural gas.
The price for a million British thermal units of natural gas trading in New York for delivery in November rose 56 cents, or 8.8%, to $6.911 Wednesday as supply jitters rattled investors. The increase came on the same day the price of oil dipped from an all-time high of nearly $50 a barrel. That was the first daily decline in two weeks.
The rise in natural gas prices suggests that although oil has been stealing the headlines, it isn't the only energy source to warrant attention. In fact, many analysts expect natural gas prices to continue to rise, perhaps hitting record highs this winter.
"If we have a normal winter ... we will probably see prices in the $10-to-$12 range and possibly higher," says Andy Weissman, chairman of Energy Ventures Group, a Washington-based investment firm.
About 55% of U.S. homes are heated with natural gas. While it's unclear whether the recent price rises will directly show up on consumers' bills, prices are expected to be higher this year than last, and the latest gains will likely bolster those predictions.
The Energy Department earlier this month predicted the total winter heating bill for the average natural gas user will be $1,010, up 17% from last winter and 68% higher than the 2001-02 season.
"As always, the severity of the winter will undoubtedly be the biggest, single determining factor impacting the market," says a report by the Natural Gas Supply Association scheduled for release today.
While not making a specific price prediction, the group, which represents natural gas producers and marketers, says in its annual heating outlook that the combination of a strengthening economy, expectations for a colder winter in the East and flat production will likely offset higher-than-usual inventories to boost prices.
Like in the oil markets, tight supplies for natural gas mean any hints of disruptions have the power to spark skyrocketing prices. Wednesday, investors reacted to news that production continued to be stymied in the Gulf of Mexico, home to about a quarter of total U.S. natural gas output, after Hurricane Ivan.
The Minerals Management Service said Wednesday that more than 1.2% of annual natural gas production in the Gulf has been lost since Ivan blew through on Sept. 11; 2% of annual oil production in the Gulf has been lost.
The price of a barrel of crude oil fell 39 cents to $49.51 Wednesday after a government report showed an unexpected rise in U.S. oil inventories and reports suggested a cease-fire among warring factions in oil-rich Nigeria.
Find this article at:
http://www.usatoday.com/money/industries/energy/2004-09-30-natgas_x.htm
|
|
Posted on Thursday, September 30 @ 08:48:47 PDT by aaron |
|
|
|
|
| |
|
Average Score: 1
Votes: 1
|
|
| |
|
|
|
|
News
Discussions
Resources
Members
