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9.29.06 Natural gas supply plentiful, cheap That thin wallet of yours should get some relief this winter. Natural gas prices have dropped substantially going into winter. To make the news even better, an El Niño system is forming in the Pacific Ocean, which could mean a warmer-than-normal winter. "These are the lowest prices in a long time," said Scott Keep, senior vice president at Metropolitan Utilities District. The October price of gas at M.U.D. will be about 50 percent below the price a year ago. And it will be the lowest price the district has seen in three years. Gas prices are down across the United States. The Natural Gas Supply Association issued its annual winter price preview Thursday. That report echoed Keep's observations: Market forces are pushing prices down. There's a record amount of gas in storage for this time of year, providing a good cushion as winter approaches. The Gulf of Mexico thus far has experienced a relatively benign hurricane season, so production there is returning to normal after last year's devastating storms. And gas production is higher than it has been. Natural gas prices are notoriously volatile and vulnerable to weather. A severe winter could cause prices to spike. But the National Oceanic and Atmospheric Administration reported this month that El Niño conditions are developing in the Pacific Ocean. Typically, El Niño weather patterns result in warmer-than-normal weather in the western and northern United States. The current long-range outlook for Nebraska is for three months of temperatures that should be warmer than normal. The price that M.U.D. will be paying for gas in October is more than 25 percent below what it paid in September. "It's kind of a strange story, just how dramatically prices have turned around in the last month," Keep said. "There is nothing to prop those prices up anymore, and the market is doing what it should do." Falling natural gas prices have figured significantly in national news recently. They are the reason that a hedge fund lost about two-thirds of its worth, costing investors billions of dollars. The Amaranth Advisors LLC had bet heavily on gas prices remaining high. |
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