Today March’s natural gas future prices were released bringing better news than last year. Natural gas futures dropped by about 5% bringing them to their lowest point in almost 4 years. The cause? Information released by the National Oceanic and Atmospheric Administration forecasts higher than normal temperatures for the next 14 days, bringing us to the end of February. With winter rapidly coming to a close, the probability of winter weather becomes more bleak with each passing week. Because winter weather drives up heating demand, the price in natural gas spikes and supply lessens. However, a cold front is not seeming likely at this point.
The mild weather coupled with rising production has culminated in a 19% drop in prices from year to date. The Energy Information Administration released that both residential and commercial natural gas consumption is down 1% from last year due to the low demand for space heating. Marshal Steeves, an energy analyst at MarketWatch says, “It’s really a combination of a very mild winter and dampening demand with rising supplies.” If you haven’t considered looking into gas prices, now would definitely be a good time to start.
Written by Kristin DeBias