Tallahassee Journal

Ample Natural Gas Supplies Mean No Repeat of Winter Price Spikes

Ample Natural Gas Supplies Mean No Repeat of Winter Price Spikes

The mercury is dropping in much of the United States, but a repeat of 2014 natural gas price spikes is likely not in the cards.1408620579000-GAS-PRICES

The harsh winter in January and February of last year prompted an excessive draw down of natural gas stocks, with inventories dipping far below the running five-year average. With shortages in certain regions, particularly in and around New York and Boston, natural gas prices shot up. Henry Hub prices briefly doubled from just above $4 per million Btu (MMBtu) in January, to above $8 per MMBtu in the first week of February.

That has prompted concerns of a rerun in 2015 of high prices. With inventories depleted, there were fears that new supplies would not replenish empty storage fast enough in time for this winter

But fresh data from the Energy Information Administration (EIA) suggest that is unlikely. There are two reasons for this. First, this year’s winter has so far been relatively mild, with tolerable temperatures across the country in December. That has led to less consumption of natural gas than anticipated.