Average U.S. monthly natural gas spot prices for April rose 42.98 per cent from March, to $3.26/MMBtu, but the average is still 37.67 per cent below the 5.23/MMBtu average in April 2001, according to new data released recently.
In a survey by Inside FERC’s Gas Market Report, whose spot price surveys set the benchmark prices for most monthly spot contracts in North America, the average price of natural gas delivered to the premium New York and New Jersey markets climbed 35.14 per cent for April to $3.73/MMBtu, compared with $2.76/MMBtu in March and $5.86/MMBtu in April 2001, reported Platts.
In Southern California, where the monthly average reached $12.51/MMBtu in April 2001, the average monthly spot price for April 2002 was $3.42/MMBtu, up 50 per cent from $2.28/MMBtu in March. The April average is 72.66 per cent below the April 2001 level.
“The huge shoulder-month jump in natural gas prices was driven by several forces, including rising oil prices, technical moves in the gas-futures contract and worries over tight supplies later this year,” said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC’s Gas Market Report.
The steady climb in oil prices – to an equivalent of $4.72/MMBtu on April 2 for heating oil in New York – has been pulling gas prices higher. Helping that up-trend in March was the April gas-futures contract, which skyrocketed from $2.359/MMBtu on March 1 to $3.472/MMBtu when it expired March 26.
“Much of the futures contract’s increase was attributed to a large number of short-positioned speculators caught in a squeeze as the month progressed. Finally, a number of analysts in March revised upward their 2002 price projections based on uncertainties about whether there will be enough gas available to meet power-generation needs this summer and heating loads next winter,” added Doolan.
On April 2, the average price for gas futures contracts for the coming 12 months — an indication of the marketplace’s price expectations — was $3.831/MMBtu, up 37.2 per cent from the $2.792/MMBtu average on March 1 and down 25.79 per cent from the $5.163/MMBtu average on April 2, 2001.
Platts is a provider of energy information and marketing services. Additional information is available at www.platts.com and www.plattsmetals.com.