Professor Mark J. Perry's Blog for Economics and Finance
According to new data released today from the NYMEX via the EIA, the price for natural gas futures hit a 6.5 year low of $3.51 (per Mil. BTUs) yesterday, the lowest level since mid-September 2002 (see chart above).
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
14 Comments:
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Dimethyl sulfide never smelt soo sweet...
Oil prices and Natural gas Prices are only falling because I spent $26000 on retrofiting my house with Geo Exchange heating instead of propane....
Gullible...just wait, the nat gas prices will head up again.
The energy polities of this administration & Congress will suppress the building of new coal plants and result in the closing of many existing ones, while waffling on nuclear. Although lots of $ will be spent on wind and solar, much generation capacity will in real life be swung over to natural-gas-fired. Some of these plants will be the highly-efficient combined-cycle type, but due to environmental litigation, many of them will be less-efficient peaking turbines, deployed on a near-emergency basis. In any event, lots more nat gas will be used for power generation, and this will likely drive prices considerably higher.
Since natural gas is one of the purest economic indicators, that is not good news for those thinking we're coming out of the recession.
BxCapricorn,
The abundant supplies of cheap natural gas through the latter-half 1980s, and throughout the 1990s, was a boon for the U.S. economy.
It's better argued that abundant supplies of cheap oil and gas were a detriment to the Middle East gas industry. Because both were in excessive supply, particularly oil in the late '90s, much Middle East-produced gas was flared off because it wasn't worth the beans to sell - not when the Asian Financial Crisis was drowning it with $10 a barrel oil.
This winter, during the global warming crisis, I paid the highest gas bills ever. This 40% drop in rates did me no good.
Where is the Balic dry index ?
During the energy boon of Summer 2008, there was a scramble to put natural gas wells ANYWHERE...
Does this low number suggest that we are dealing with over-production or a huge diminished need for natural gas?
Last, is there any way Obama's future energy policies are putting additional stress on the industry?
usmegatrends.blogspot.com
Get real people.....There is a new natural gas pipeline from Wyoming to Ohio...There are more plans for pipelines to California and the Pacific Northwest...Supply-side at work...What is Alaska doing??
Does anyone read the Internet????
Does this low number suggest that we are dealing with over-production or a huge diminished need for natural gas?Both.
Demand has actually held up pretty well due to colder than normal weather offsetting industrial decline.
Supply has been humming, but rig count is now half of what it was at peak.
Current rig count is not enough to offset decline/sustain supply. Ergo, current prices are unsustainably low.
Unless one assumes we get a flood of foreign LNG...
I don't think prices will fall much further if environmental regulations get stricter. Businesses, especially power companies, will be forced to switch to gas from coal.
Prices are going to 1997 levels and will stay there for a while: 1. the rig-lay down supply driven price scenario is fallacious, 2. LNG is coming and is dirt cheap and will flood the US market, 3. Demand is oh so weak and getting weaker, 4. Regulation of CO2 and other emissions and other gov programs will not manifest in increased usage of NG anytime soon. Full analysis here: http://www.thebarricadeblog.com/?p=837
My electric utility bill is based on the Natural Gas Price. How can I hedge against a steep rise in the Natural Gas Price? Suggestions would be welcome.
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