EIA: Natgas Prices Losing Seasonality
Variance decreasing between summer and winter prices
The U.S. Energy Information Administration (EIA) reports that the variance is decreasing between summer and winter natural gas prices.
Gas prices normally are higher in the winter, reflecting demand for heating. EIA said over the past four years, the spread between the New York Mercantile Exchange price for delivery in February and for delivery in November has decreased from an average of US$0.65 per MMBtu in October 2010 to US$0.24 in October 2013.
The agency explained that increased gas production, particularly in the Northeast, has required less gas to be withdrawn from storage. Net withdrawals fell during the winter of 2012-13 compared to the winter of 2010-11 despite higher consumption and lower net imports.
Also, EIA said consumption in November through February, as a share of yearly gas usage, has dropped from 41% in 2010-11 to 39% in 2012-13, demonstrating that gas consumption is increasing in other months of the year for other uses, such as for electricity generation during the summer.