Natural Gas Prices
Natural Gas Prices
executive summary on Natural Gas Prices by Jimmy Sturo
Natural Gas Prices
simple supply and demand model dictates natural gas prices. As supplies become scarce and demand picks up, natural gas prices increases. Consequently, natural gas prices treads an extremely tight balance between supply and demand in its endeavor to meet increasing demand from homeowners, businesses, factories, schools and power-generation plants.
The wholesale natural gas prices in the US during the 1990s was about $2 per thousand cubic feet (Mcf). This natural gas prices, according to the U.S. Energy Information Administration, is predicted to reach $9 per Mcf during the current 2005-2006 winter seasons.
Natural gas prices seem to be affected the most by weather conditions. This sensitivity to weather is evident during winters (for heating) and summers (for cooling).
Analysts who have observed the trends in natural gas prices in recent years are of the opinion that natural gas as a fuel option is a disaster waiting to happen.
Who Regulates Natural Gas And The Effects Of Regulation On Prices
executive summary on Who Regulates Natural Gas And The Effects Of Regulation On Prices by C. Jent
Each state has a public utility commission that regulates natural gas utilities. Surprising as it may seem the natural gas utilities aren’t allowed to make any money from the natural gas itself.
The state utility commissions not only oversee the rates utilities charge but issues related to construction and maintenance of adequate supplies for customers. There are three federal agencies that regulate the natural gas industry as well. They are the Federal Energy Regulatory Commission (FERC), the Securities Exhange Commission (SEC) and the Commodity Futures Trading Commission.
The fluctuations in the natural gas prices are more related to supply and demand issues than to the individual utility companies increasing their profits. When natural gas prices increase, most people become more frugal in their usage.
Many state public utility commissions are exploring the decoupling of rates from amounts used for utilities. Today, with the rates charged tied to the amount used the utility companies have less incentive to be concerned about energy efficiency.
The actual natural gas prices is mainly influenced by supply and demand as in most free markets. It is a very efficient fuel source that is much friendlier to the environment than oil. U.S. Energy Information Administration (EIA) issues winter natural gas prices forecasts once a month during the winter.
