We are enjoying $3.00 or less for a gallon of gas at the pumps. The outlook for natural gas to heat our winter homes is not as good. Here are some projections for natural gas prices from MSN.com.
“It is now looking almost certain that stocks of natural gas in the U.S. will be significantly lower than the five-year average” when temperatures begin falling in November,” said Tom Pugh, commodities economist for Capital Economics.
“Another cold winter, combined with lower stocks than last year, could lead to even higher price spikes than last year.”
Natural gas producers are busy this time of year building up supplies. But despite record production, natural gas storage levels are still below their five-year range heading into the winter heating season. Storage levels are more than 10 percent lower than last year’s levels.
That means homeowners who heat with gas could see the same price spikes they saw last winter during cold snaps. The average bill for gas customers will be up 10 percent over last year.
Two-thirds of U.S. homes used natural gas. Power plants use about a third, with commercial and industrial uses taking up the rest. Much of that new demand is coming from electric utilities converting older coal-fired power plants to cleaner burning natural gas. Nationwide, gas consumption by electric power producers is up more than 20 percent since 2008.
“The upshot is that we continue to expect the price of U.S. natural gas to rise to $6 per million Btus by the end of 2016 compared to around $4 today,” said Pugh.
With a project 10% in natural gas prices, conservation becomes even more important for the average family to control energy costs. If your furnace is 15 years old, now would be a good time to investigate a higher efficiency furnace to save on energy costs. Give us a call and we can show you energy saving options. 952-513-4884.