Price Volatility In Natural Gas Markets

Jay Hakes, Administrator, Energy Information Administration (EIA)

DOE/NARUC Conference

10/5/98


Click here to start


Table of Contents

Overview

Consumer Prices Declined Substantially From 1980's Peak Prices

Increased Price Volatility Has Become Common In The Gas Industry

Price Volatility Is Not Always Associated With High Prices

Natural Gas Has Been The Most Volatile Of Energy Prices, Except For Electricity

Energy Prices Are More Volatile Than Other Commodities

What Are The Main Drivers Of Short-term Price Volatility?

As Stocks Move Below Normal Ranges, Prices Generally Move Up

Storage Withdrawals In The 1996/97 Heating Season

Beginning Heating Season Stocks Have Declined Over Time

Price Volatility Increased As Beginning Heating Season Storage Levels Declined

Residential Prices Do Not Reflect The Volatility Seen In Wellhead Prices

In 1996/97, Residential Gas Prices Moved Well Above Year Earlier Levels

Residential Gas Consumers Used Less, But Paid More In 1996/97

Price Hedging Does Not Eliminate All Risk For Market Participants

Residential Customers Can Benefit From Effective Information Programs

Summary

Author: Joan Heinkel and William Trapmann

Home Page: www.eia.gov