The U.S. Energy Information Administration (EIA) said on December 12th that natural gas prices in the U.S. will continue to rise until low supplies are replenished.
Mark Mazur, acting head of the EIA, told a Senate committee examining the gas market that: “High and volatile gas prices will prevail until significantly more gas supplies enter the market, although the likelihood of that in the near future is not high.”
Mazur indicated that U.S. consumption of natural gas is expected to increase by 6 percent this year, with this winter forecast to be the coldest in three years.
The U.S. Energy Department has estimated that natural gas heating bills will be 50 percent higher this year than last, even given normal winter weather.
With nationwide inventories 14 percent below the five-year average and demand on the rise, natural gas wholesale prices for January delivery climbed at the start of the week to $9.41 per thousand cubic feet, almost four times higher than last winter, before trending downwards on December 12th. The EIA expects wholesale gas prices to average $5.60 per thousand cubic feet for the October-March period, more than twice as high as the same period in 1999.
Mazur cautioned that an unusually cold winter could send prices even higher. A spokeswoman from the National Association of State Energy Officials, addressing the Senate committee, also said that: “The country is in an energy crisis.
Skyrocketing prices for natural gas, combined with rising heating oil, kerosene and propane costs, and attendant electricity price increases for many households, leave the most vulnerable households at serious risk.”
