Comments on: Natural Gas Prices Change (Again)

By: jim

jim — Sun, 26 Feb 2006 17:10:14 +0000

Randy,
I had the same thought with regard ot the news and I felt it was a little conspiracy-ish but consider how production hasn’t falled but prices have spiked (for example, with the attack in Saudi Arabia) which equals more profit.

By: Randy Kirk

Randy Kirk — Sat, 25 Feb 2006 17:05:29 +0000

I buy LDPE by the carload. The underlying raw material is natural gas. Our pricing almost doubled last year, and is only creeping down a bit at this point. There are many componants to this whole mess, but among them:

Actual Supply and Demand
Perceived Supply and Demand
Fear by major purchasers creating hording
Greed by major suppliers creating false shortages
Unrest drives up futures markets
And my own personal touch – I think the major countries who supply energy are creating the crisis of the week to keep prices high. One week its Russia, then Venezuela, then the middle east, then Africa. I even suspect there are phone calls: “Your turn.”

No, I’m not a wacko conspiracy theorist, but check out the news over the last two years. With the exception of Katrina, the rest of the spike in pricing can be attributed to the “news” of the week spooking futures.

By: Jose Anes

Jose Anes — Thu, 16 Feb 2006 18:43:25 +0000

Yupi!!!!

Lower gas bill!!

By: nickel

nickel — Thu, 16 Feb 2006 15:24:54 +0000

Jeremy, I think you’re exactly right… We’ve overpaid thus far this year, so the new rate actually represents an underpayment to bring things back into line.

By: Jeremy

Jeremy — Thu, 16 Feb 2006 15:17:29 +0000

As with everything else, the price of natural gas is based on supply and demand. Prices have been rising in recent years due to an increased demand for electricity. While about 1/2 of our nation’s electricity is still generated by coal, natural gas is gaining in both percentage and total amount. This trend is likely to continue with the new rules promulgated by EPA to reduce fine particles. I don’t think we’ve had a new coal plant built for decades (new plants are generally natural gas.)

My guess as to the reason why prices have declined (albeit off a much higher base) is because a) the winter is mild along the East coast and b) the downtime of the wells and pipelines in the gulf was not as long as some imagined.

As FMF points out, even if prices have fallen, we’re still paying more for less. Perhaps the reason your equal payment plan is lower than when you started is because you overpaid during the high-priced period and they’ve dropped the cost to enable you to “consume” the surplus.

By: FMF

FMF — Thu, 16 Feb 2006 13:39:35 +0000

All I know is that I’m paying a LOT more than last year — for less fuel.

By: jim

jim — Thu, 16 Feb 2006 05:18:15 +0000

True, natural gas is decreasing (it HAD to) so we’ll see. If electricity is generated using natural gas, you’re just getting screwed on both ends.

By: nickel

nickel — Wed, 15 Feb 2006 20:40:53 +0000

Actually, the local news has been running spots about how much the price of natural gas is DECREASING while at the same time the price of electricity is INCREASING.

By: jim

jim — Wed, 15 Feb 2006 20:31:44 +0000

This whole natural gas thing is insane, I’m on entirely electric so on the whole I’ve been pleased with energy prices but something had to generate that electricity…

By: nickel

nickel — Wed, 15 Feb 2006 14:25:10 +0000

Actually, they’ve been surprisingly close to spot on in years past, it’s just this year in particular (with Katrina, etc.) that has thrown things into chaos. I’ve actually been quite surprised that they haven’t engineered a large overage into each year’s, which would pretty much be an interest free loan to them until it was time to settle up.

By: Nick

Nick — Wed, 15 Feb 2006 14:12:36 +0000

...all of these fluctuations sort of make question why they refer to this as an EQUAL Payment Plan. Because they plan for all of those large payments you are making to equal a tidy profit for them.