Natural Gas Prices

Energy experts across the world share the belief thatsteel, glass, chemicals, automobiles, food and industrial
natural gas is most likely to displace gasoline in thesectors.The wholesale price of natural gas in the US
future, since natural gas is a cleaner and a moreduring the 1990s was about $2 per thousand cubic
efficient fuel than gasoline. Moreover, with oil suppliesfeet (Mcf). This price, according to the U.S. Energy
getting smaller with each passing day, natural gasInformation Administration, is predicted to reach $9 per
would perhaps be the only option left for meeting allMcf during the current 2005-2006 winter
energy needs. Not surprising, natural gas today isseasons.Natural gas prices seem to be affected the
experiencing rising popularity in the US, Asia andmost by weather conditions. This sensitivity to weather
Europe. Another crucial factor that is driving theis evident during winters, when people tend to use
popularity of natural gas is the concern that oil suppliesmore gas for generating heat. During summers there is
are getting exhausted very fast.simple supply andan increased 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.Analysts who have observed the trends in natural
natural gas increases. Consequently, natural gas pricegas prices in recent years are of the opinion that
treads an extremely tight balance between supply andnatural gas as a fuel option is a disaster waiting to
demand in its endeavor to meet increasing demandhappen. The analysis is not without reason. It is now
from homeowners, businesses, factories, schools andclear, from recent happenings that a few months of
power-generation plants. Today, natural gas meetsinclement weather can result in severe shortages and
about one-fourth of the total energy needs of the US,skyrocketing prices. And worst, there is little supply side
and is considered the backbone of the manufacturing,solution.