News / Business
Natural Gas Prices to be Driven by
Strengthening El Niño conditions and record-level storage will keep natural gas prices from spiraling out of control.
Another storage injection is likely to occur this week and inventories are already over 3,800 Bcf. According to the Energy Information Administration (EIA), working gas in storage is only capable of holding approximately 3,889 Bcf. Chances are inventories won’t reach that level before the cold weather really sets in, but inventories are starting out this winter heating season at close 400 Bcf higher than last year at this time.
“It’s going to take some time to work through these inventories this winter, and developing forecasts calling for a strengthening of El Niño conditions, isn’t going to help,” says Valerie Wood, President of Energy Solutions, Inc. “If El Niño does strengthen, it means moderate winter temperatures throughout much of the nation, with the exception of the southeast region of the U.S. With sluggish industrial demand, storage inventories could very well be at very high levels yet at the end of December.”
Wood admits that there’s a lot riding on El Niño at this time. “If it doesn’t strengthen as anticipated, you could have the complete opposite occur and end up with a bitter cold winter in the northern part of the U.S.,” says Wood. “Either way though, we believe there is still going to be a lot of natural gas in storage even if it is colder than normal and that is going to help to keep natural gas prices down as we head into 2010.”
Learn more about natural gas price direction in the November edition of The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry. It keeps companies alert and aware of ever-changing conditions and costs associated with natural gas to help them make intelligent gas purchasing decisions. The Advisor is written by Valerie Wood, President of Energy Solutions, Inc., a company that specializes in helping manufacturing and service companies, of all sizes, more cost effectively purchase their natural gas supplies. Request a complimentary copy of the November edition of The Advisor by sending an e-mail to request-nov-pr17@energysolutionsinc.com or call (608) 848-9589.
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About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.
