Natural Gas Graph showing the settlement price trend
A gradual trend down in the settlement price, that isn’t what they said would happen?
The Natural Gas Price in the United States has shown a gradual trend down over the last 2 months. It seems quite strange to many as they have been told by the electricity providers to hurry and sign up before the summer because natural gas will be in high demand as people start to turn on their air conditioning and using up all that electricity.
Has the summer caused a spike in Natural Gas Prices?
The summer has had the opposite effect. There has been more then enough natural gas in storage to meet with the demand. This surplus has caused energy traders to rethink things this year as the natural gas price has been trading low over the last two months. In Texas we have a 90% correlation with natural gas in terms of electricity and so we have seen electricity prices go from the high 9’s down to below 7 cents per kwh the last 2 months. Many people are scratching their heads after being told to sign up on the 9 cent electric rate when now in the dead heat of summer we are seeing rates as low as 7 cents a kwh.
Did the electric provider at TXU lie to me?
No they didn’t lie they just speculated on what natural gas usually does every year. During the summer you see some superficial spikes up when people turn on their air conditioners. This then effects the storage supply’s of natuarl gas so when these air conditioning spikes occur they lose that storage necessary to cover peak demand times. This comes very close to causing a shortage and so the price goes up. So did they lie to you? No you can’t call it that. Sure they wnted your sale but they were actually giving you a decent guess as to what might happen. Are sales people dishonest? Many times yes and they can sometimes offer you more information but this time we can’t say they lied.
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August 2nd, 2007 at 4:05 pm
Natural Gas is on its way down. Yesterday it came down 2 % and I think it will come down even more. I’m locking in an energy agreement in a week.