News / Business
Natural Gas Price Report Provides Insight into Daily Price Volatility
Natural gas prices are not responding to widespread heat because supplies are more than ample and economic recovery is sluggish.
A lack of jobs, deflation concerns, double-dip recession fears, deficit spending, financial reform, and an economic slowdown in Europe and China are keeping the natural gas market on edge. These uncertainties have outweighed hotter-than-average temperatures, which historically would have a bullish price impact on natural gas prices.
Recent data from the Energy Information Administration show that natural gas production in the Lower-48 states continued to climb in April 2010 and supplies are more than ample to meet demand. According to Valerie Wood, President of Energy Solutions, Inc., “These concerns are causing companies, both small and large, to remain hesitant to hire and take on more overhead, particularly with the unknowns of potential increased costs of health care and rising tax rates. In order for natural gas demand to increase, the economy needs to undergo more significant recovery.”
Negative economic data are outweighing any positive news, and that is a primary reason why 2010 natural gas NYMEX prices continue to trade in a range of $4-$5 per MMBtu, even as hotter weather has increased demand from the electric generation sector.
Wood goes on to explain, “Right now, economic data are bearish and the tropics are quiet. The longer these factors remain in place, the lower prices are expected to move. But even so, prices are not expected to dip to price levels as low as the summer of 2009.”
Stay on top of what is happening in the natural gas market by viewing Natural Gas Price Report each day.
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About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 50 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.
