Natural Gas Prices Set Record, Pointing to Costly Winter

Natural gas prices set a new record today, presaging higher heating bills for a majority of Americans this winter as well as soaring costs for industrial manufacturers of such products as plastics and chemicals.

Since the beginning of the summer, the price of natural gas has doubled. But unlike crude oil or gasoline, whose recent gains have been widely felt by most Americans, the surge in natural gas prices, the most popular form of energy for home heating, has so far gone largely unnoticed.
That is about to change as colder weather sets in. A hot summer, which pushed up natural gas consumption by electricity companies and depleted winter stocks, is expected to give way to a cold winter, which will push up residential consumption. Meanwhile, the Gulf Coast, the nation’s largest energy hub, has suffered devastating punches from two severe hurricanes.

All these factor have now come together to create a natural gas crisis.

“It’s still under most people’s radar screen right now,” said Carl Neill, an analyst at Risk Management Inc., a natural gas consultant and brokerage firm Chicago. “The public has absolutely no idea how high prices are going to be this year. It’s going to be mind-boggling. Price are going to be 50 to 100 percent higher for residential consumers than in previous year.”

NY Times