Natural gas prices to stay flat

COLUMBUS, Ohio - As Ohio Gas Company Vice President Bob Eyre likes to say, the weather and the economy are the wild cards in determining natural gas prices.

For now, it seems the consumer is holding the winning hand.

A surfeit of natural gas will keep prices level during the winter season, and if the season proves mild they may even go down. Production is down 50 percent from this time last year due to the recession and a decreased demand, and prices are 40 percent lower.

The price per thousand cubic feet (ptcf), which jumped two weeks ago to above $5, has fallen below that level and will likely remain flat at between $3-$5, said Roy Rushing, president of the Ohio Gas Association.

Prices are flat because the amount of natural gas in storage totals 3.734 trillion cubic feet. Rushing said that's a new record, and 13 percent above the five-year average.

"I don't know where they can put any additional gas," he said. "Operationally, there's almost no place for gas to go."

The association is always glad for lower gas prices, but with storage space at a premium he was almost thankful for a cold start to October, Rushing added.

"We are just very, very long on gas inventories. I've been doing this for 15 years, and there's never been anything like this in my memory," he said.

According to Rushing, natural gas cost $7 ptcf this time last year. However, if this winter stays mild like the fall, consumers could see a price of under $3 ptcf, he said.

Eyre said natural gas prices are volatile right now but agreed they should remain level through the winter. However, if the economy picks up and winter turns cold the prices could rise later, he said.

And those conditions could cause a natural gas shortage next year beginning in the summer, he said.

But Eyre said any price increase would occur gradually, not in large spikes

(Information from the Fulton County Expositor - a FOX Toledo News media partner)