Natural Gas Prices

Energy experts across the world share the belief thatsectors.
natural gas is most likely to displace gasoline in theThe wholesale price of natural gas in the US during the
future, since natural gas is a cleaner and a more1990s was about $2 per thousand cubic feet (Mcf).
efficient fuel than gasoline. Moreover, with oil suppliesThis price, according to the U.S. Energy Information
getting smaller with each passing day, natural gasAdministration, is predicted to reach $9 per Mcf during
would perhaps be the only option left for meeting allthe current 2005-2006 winter seasons.
energy needs. Not surprising, natural gas today isNatural gas prices seem to be affected the most by
experiencing rising popularity in the US, Asia andweather conditions. This sensitivity to weather is
Europe. Another crucial factor that is driving theevident during winters, when people tend to use more
popularity of natural gas is the concern that oil suppliesgas for generating heat. During summers there is an
are getting exhausted very fast.simple supply andincreased demand for cooling, which translates to a
demand model dictates natural gas prices. As supplieshigher demand for electricity to power air-conditioning
become scarce and demand picks up, the price ofunits.
natural gas increases. Consequently, natural gas priceAnalysts who have observed the trends in natural gas
treads an extremely tight balance between supply andprices in recent years are of the opinion that natural
demand in its endeavor to meet increasing demandgas as a fuel option is a disaster waiting to happen.
from homeowners, businesses, factories, schools andThe analysis is not without reason. It is now clear, from
power-generation plants. Today, natural gas meetsrecent happenings that a few months of inclement
about one-fourth of the total energy needs of the US,weather can result in severe shortages and
and is considered the backbone of the manufacturing,skyrocketing prices. And worst, there is little supply side
steel, glass, chemicals, automobiles, food and industrialsolution.