Monday, February 24, 2014

The Short Era Of Cheap Gas Ended In January: Has It Gone For Ever?

Natural gas cost $13 for a thousand cubic feet in July 2008 and then plunged for 4 years, until bottoming at less than $2 in April 2012.

Ever since April, 2012, natural gas prices have been marching upward and have reached record highs in some areas of the country.  The Energy Information Administration reports that natural gas spot market or daily prices averaged $22 in the Boston market from January to February 18th.

Spot market prices are always volatile and affected substantially by weather, but new record highs in an era of the shale gas supply boom is still notable. Non-spot prices have also increased significantly--by 150% to 200% from the April 2012 low--but have not approached record prices.

The era of cheap gas that stretched from 2011 to 2013 has ended. Has it gone for ever?

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