Natural Gas Prices In No-Man’s Land

The natural gas market has been extremely indecisive thus far in 2010.  Price rallies or price declines seem to last just one day.  Bitter cold and higher natural gas storage withdrawals have placed support under natural gas prices, but ongoing growth in production and the fact that two months of winter have passed have thwarted any rally attempts.

 “The market is dealing with a lot of uncertainty, and uncertainty provides price support,” says Valerie Wood, President of Energy Solutions, Inc.  The uncertainty that Wood is referring to is two-fold.  First, actual weekly storage withdrawal reports have been considerably above or below projections, and that is because demand has been very challenging to estimate.  Second, U.S. Department of the Interior Secretary Ken Salazar recently called for “reforms” on oil and gas leasing on public lands, and some fear this could mean reduced drilling.

“The natural gas market is kind of in no-man’s land right now,” says Wood.  “With colder temperatures in the north and crude oil trading at $80+ per barrel, natural gas prices have been unable to fall.  Conversely, with production remaining quite high and no concrete evidence that industrial demand has truly rebounded, natural gas prices have been unable to rally beyond $6 per MMBtu.  For now, the February 2010 natural gas NYMEX contract is likely to remain in a trading range of the mid- to upper $5 per MMBtu.”

Learn more about natural gas price direction in the January edition of The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry and price trends.  The Advisor 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 January edition of The Advisor by sending an e-mail to request-pr@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.