A combination of factors has pushed natural gas prices to their lowest levels in a decade, marking a prime opportunity for natural gas customers to save money by locking in low, fixed-price plans.
On Feb. 1, the price of a million cubic feet of natural gas fell to $2.38 on the New York Mercantile Exchange (NYMEX), the lowest since falling to $2.28 in February, 2002. The all-time record low was $1.05 in February, 1992.
Industry experts credit the fall of natural gas prices to several factors, including mild winter temperatures, record natural gas storage and record gas production caused primarily by unlocking the natural gas contained in the Marcellus shale region over the last five years. According to a recent report, the Marcellus shale region, mostly in western Pennsylvania and eastern Ohio, is so plentiful that by itself it could supply the United States with natural gas for 18 years. Other increases in production have been attributed to the recovery of natural gas at older and previously tapped-out wells in areas of Texas and North Dakota.
Although dropping prices will hurt natural gas producers, residential and commercial natural gas customers will come away big-time winners.
“The fact of the matter is that now would be a great time for residential and commercial customers to lock in low, fixed-price plans with a retail natural gas supplier no matter where they live,” said Jim Head, Spark Energy Vice President of Marketing and Sales. “People have a tendency to try and lock in prices when energy prices are on the rise, out of fear that they’ll rise further, but people should also take a look at what their fixed-price plan options are when energy prices fall. With natural gas prices at the lowest level in a decade, customers could gain significant benefits from locking in prices now with fixed-price plans that will get them through the rest of this heating season and next winter, as well.”
“Mix of Factors Could Further Cut Natural Gas Costs,” The Toledo Blade, Feb. 5, 2012.