Where Are Natural Gas Prices Going?
Jan 2014 Update: A very cold winter caused a larger drawdown than expected. Prices will peak towards the end of February and then trend downward somewhat for the next few months.
May 2013 Update: Gas rose quite a bit (OK, I was wrong). This was due to a long and colder winter than expected, large bulk sales to Europe, and not delivering available supply (artificially restricting supply). Now that the warmer weather is here, you'll see it drift down from it's current 4.24 I would expect.
Jul 2012 update: Gas continued down but has since started to go up. Producers started capping wells to stop the price from falling further. Today it's at 3.21/therm. I doubt it will go up much further from here, even as we gear up for the winter heating season.
Mar 2011 update: as we thought it would, gas is still lower: $2.34/therm. Natural gas cars anyone? ;-)
Dec 2011 Update: gas has indeed trended lower - hitting $3.14/therm in electronic trading = cheap.
Note: It's actually cheaper to heat your house with gas than wood now (assuming you have to buy your wood)....
So where are gas prices going in the forseeable future? - the Answer may surprise you:
Note: This is a vote for NOT buying a high efficiency gas appliance - if gas is really cheap, then it will be harder to recoup the premium in gas-cost savings (which will probably pressure Navien and others to lower their prices...)
Why will gas go/stay down for the NEAR term?
There are a number of reasons for this:
1) The US dollar will appreciate as the Euro collapses - which will cause commodity prices to fall.
2) New discoveries of natural gas in North America
3) New technologies for extracting natural gas e.g. fracking
4) Recession in USA will continue to worsen - less demand for Natural gas.
To view trend indicators for yourself, you can go here:
(High inventory indicates downward pressure on prices)
(Lower forward contract price indicates lower prices - all subject to change at any moment)