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Gas prices likely to remain steady
By Grace Wyler
Pressures on natural-gas prices are likely to remain stable in the upcoming winter heating season, according to reports from two trade associations this week.
An overall rise in natural-gas demand likely will be offset by a supply increase, resulting in steady prices through the winter months, the Natural Gas Supply Association said in a report.
The report — the association’s annual outlook on winter natural-gas prices — notes that demand is projected to increase by 2.4 percent this winter, primarily as a result of growth in the industrial and electric-utility sectors.
This rise in demand likely will be offset by domestic natural-gas production, expected to approach its highest levels in decades due to a rise in onshore drilling and activity in areas such as Pennsylvania’s Marcellus Shale.
Increased production, combined with robust storage capacities, likely will be more than enough to meet any increase in demand, said Jenny Fordham, vice president of markets for the Natural Gas Supply Association.
“This is really a supply story,” Fordham said. “We looked across the board at all of the fundamental measures, and supply is robust — that is the key factor in why winter-to-winter pressure on natural-gas prices is flat.”
The weather this winter is expected to be similar to last year’s, Fordham added, which further contributes to the stable price projections.
The Natural Gas Supply Association’s report — which measures the outlook on wholesale natural-gas prices — echoed projections from the American Gas Association’s annual forecast, which looks at retail gas prices for residential and commercial customers.
The American Gas Association’s report said that plentiful natural-gas supplies are expected to meet consumer demand and keep costs low, in the absence of severe weather this winter.
In Northeast Ohio, natural-gas utility rates have increased slightly, reflecting a minor rise in October wholesale prices.
Columbia Gas of Ohio’s October rate, which began last week, is 57.7 cents per 100 cubic feet, up from 55.8 cents in September. Dominion East Ohio’s rate will change to $5.04 per 1,000 cubic feet, up from $4.85 last month. Dominion East’s new rates go into effect Thursday.
Dominion East and Columbia set prices monthly by adding a determined price to the natural-gas price set on the New York Mercantile Exchange. That amount — 19.3 cents per 100 cubic feet for Columbia and $1.20 per 1,000 cubic feet for Dominion East — was set at supplier auctions last spring and will remain the same through March 31.