Gas price deflates to 14-year low
The US natural gas price has slipped below $2 per million British thermal units for the first time since 2001.
US natural gas prices have slipped below $2 per million British thermal units for the first time since 2001. Prices have slid by 35% in 2015. The warmest start to a winter on record in America has subdued demand and raised concerns that the glut on the market could now last even longer. Production has remained healthy and stockpiles are close to all-time highs.
What the commentators said
So what prospect of a rebound in prices? The warm weather, a result of theEl Nio phenomenon, looks set to last until at least the end of the month. Given the oversupplied market, "without a turnaround in the weather, there's not much to halt this kind of price slide". Longer term, though, the outlook is cheerier. Demand is set to climb globally because gas is the cleanest-burning fossil fuel and "increasingly stringent environmental regulation" will dent demand for coal, said Eoin Treacy on FullerTreacyMoney.com. There is still no way of storing wind and solar energy efficiently. Overall growth in electricity usage and gas required for petrochemicals should also bolster demand, as Lex pointed out. A market bottom may not be too far away.