The price of natural gas closed Nov. 4 at $6.40 per million BTU. At Henry Hub.
That was up 43 cents from the day before. Which was down 30 cents from the day before that. Which was up 56 cents from the day before that. Which was down 65 cents from the day before that.
Which was Halloween. Pretty scary, isn’t it? This up and down and up and down volatility in gas prices.
Still, $6.40 isn’t bad considering the price has generally been higher since early April. Except for the last couple of weeks. And except for a few days around the Fourth of July.
Going forward what can we expect? Well, gas in underground storage is up.
According to the Department of Energy’s latest gas report, on the twenty eighth of October, 3,501 billion cubic feet was in storage. That’s 107 billion cubic feet higher than a week earlier. But 101 billion cubic feet lower than a year earlier. And 135 billion cubic feet lower than the 2017-2021 five-year average.
All other things being equal, the greater the amount of gas in storage, the lower will be its price. Here’s hoping the gas in underground storage will keep going up.
Because the price of gas has been driving up the public’s electric rates and bills. One way to see this is the Department of Commerce’s latest gross domestic product report. In the third quarter of 2021, residential electric bills were 1.25 percent of what consumers spent in total on all goods and services. But in the third quarter of this year, 2022, residential electric bills are up to 1.31 percent of what consumers spent in total.
Per the latest World Energy Outlook by the International Energy Agency, the European Union used six percent less natural gas in 2021, as compared with 2010. But the U.S used twenty eight percent more, China used two hundred and thirty percent more, and the Middle East used forty-five percent more.
Overall, the world’s gas use increased twenty seven percent. With greater demand, the upward pressure on price will continue.
Though, since the U.S. produces nearly a quarter of the world’s output of gas, further increases in our production and exports can have an impact.