NEW YORK — Natural gas prices have dropped well below what they were last year, and they should stay that way well into 2010, according to a recent Associated Press report. The New York Mercantile Exchange contract for January delivery at one point last week dropped to a new 52-week low of $4.432 per 1,000 cubic feet.
The Energy Information Administration (EIA) reported that the amount of natural gas in storage rose to 3,837 Bcf as of Friday, Nov. 27, representing a net increase of 2 Bcf from the previous week. Stocks were 470 Bcf higher than last year at this time, and 487 Bcf above the five-year average of 3,350 Bcf. The United States has never had this much natural gas in storage, EIA says.
Usually at this time of year, natural gas supplies dwindle as people heat their homes, but this winter has been so mild that more gas was put into storage last week. This is the first time that has happened this late in the year since at least 2001, according to the Associated Press.
According to EIA, the amount of natural gas in storage has reached new national records for seven consecutive weeks. Major industrial power users have been shuttering plants or slowing production, pushing U.S. natural gas stores to near capacity.
For consumers, gas bills should be cheaper in most parts of the country, and power companies that use natural gas will feel less pressure to raise electricity rates, although for how long remains uncertain.