Natural Gas Prices: Well Above Recent Averages
Notes:
The recent surge in spot prices at the Henry Hub are well above a typical range for 1998-1999 (in this context, defined as the average, +/- 2 standard deviations). EIA’s forecast has natural gas prices gradually declining after the winter heating season, but still remaining high by historical standards.
Several factors have come together recently that have pushed spot gas prices up sharply and which are expected to reverse the downward trend in in real gas prices for the next year or so:
- U.S. gas production has been relatively flat.
- Expected demand is high under normal weather assumptions.
- Gas storage levels are below normal.
- Alternative fuel (oil) markets are tight.