Warm Weather Trends and Natural Gas Pricing
Dec 5, 2014

It’s December 5th and expected to be 74 degrees over much of Texas today. I don’t say this to rub it in … but the fact remains that across most of the US, the weather temperatures are 10-15 degrees milder than they should be for this time of the year.

The Windy City is pretty hard pressed to reach the freezing point and will be 40 degrees on Monday! This weekend, N. Jersey hits 51 degrees! So where is the cold weather we saw in November? From now until mid-December, the Jet Stream is pulling warm moist air from the West Coast across the Country, keeping the colder Arctic Air from dropping down, as we saw last year.

What this means is a mixed bag. Gas prices move on Storage, Supply and Demand. December went off the Board at $.4282/therm and as of this writing, gas prices for January (yes, that’s right) are at $.3660/therm…. Unheard of! With that said, a cold snap later in the month can send prices up like a bottle rocket. We will compare last year to this year and the projected prices, below.

While the NYMEX is pretty reasonably priced for this time of year, those pesky Pipeline charges (Basis) are still unreasonably high. Basis for Transco zone 6 NNY (NJ) are still at $.735/therm (that’s the + side of the NYMEX), more than double the actual cost of the Gas!  Perhaps a mild winter will help going forward.

Hurricane Season ended November 15th with a whimper.  No Storms of any consequence, struck the Gulf this season and as a matter of fact, it was a pretty quiet Season overall.

Contributor, Larry Kauf, is a Senior Analyst and multi-location Account Specialist with Alternative Utility Services, Inc; providing a wide range of professional procurement and consulting services including electric, gas, residential, reverse auction, demand response, auditing, and benchmarking.

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