WASHINGTON, D.C. — If you thought warmer weather would ease concerns regarding natural gas prices, think again. Natural gas prices are expected to rise during the next several months, due to concerns about hurricane-induced supply disruptions, the anticipated gas-fired electricity demand for air conditioning and higher crude oil prices, according to the U.S. Energy Information Administration (EIA).
The Henry Hub natural gas spot price is expected to average $7.84 per thousand cubic feet (mcf) in 2007, a 90-cent increase from the 2006 average, and $8.16 per mcf in 2008. Simply, natural gas prices are expected to be similar to what you paid in 2005 rather than in 2006, although the price is expected to dip in May before rising over the next several months.
In terms of natural gas consumption, colder weather through the first four months of the year compared with last year (13% more heating degree days) has prompted a rise in expectations for total natural gas consumption this year. Total consumption was up more than 10% in the first quarter of 2007 compared with the same period last year. In annual terms, natural gas consumption is expected to rise by 3.4% in 2007 and by 0.9% in 2008.
The picture isn’t much better for summer gasoline prices, EIA reports. The average national price of a gallon of gas hit $3.073 Monday. The price is now above the previous record of $3.057, set after Hurricane Katrina hit. However, gasoline futures for June fell on Monday.
Retail regular grade motor gasoline prices are now projected to average 15 cents more a gallon this summer ($2.95) than last summer. Continuing problems for refineries in the United States and abroad, combined with strong global gasoline demand, are said to be causing the price hikes.