WASHINGTON, Oct. 3, 2001 Average U.S. monthly natural gas spot prices for October were $1.68/MMBtu, down 24.3% from September and 67% from October 2000, resulting in the lowest monthly average in more than two-and-a-half years, according to Platts.
In Southern California, where monthly prices reached as high as $16.39/MMBtu in January, the average monthly spot price for October decreased 33.8% to $1.76/MMBtu from $2.66/MMBtu in September. This was 68.4% below the $5.57/MMBtu average in October 2000 and a whopping 89% below its January peak.
In an exclusive 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 for October was $2.16/MMBtu compared with $2.60/MMBtu in September and $5.76/MMBtu in October 2000. Last January, prices there peaked at $19.33/MMBtu.
“A number of factors have lined up to hammer down gas prices,” said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC’s Gas Market Report. “Demand is way off due to the economic slump, the seasonally moderate weather and the fact that natural gas storage capacity is over 86% full with nearly five weeks to go in the injection season. Add to that a year-over-year increase in production and an increase in imports of Canadian gas, and it begins to look like the market doesn’t have much upside at least through next winter.”
On Oct. 2, the average price for gas futures contracts for the coming 12 months an indication of the marketplace’s price expectations was about $2.80/MMBtu, down 5.2% from the $2.955/MMBtu average on Sept. 4 and 50.3% from the $5.632/MMBtu average as recently as April 10.
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