Natural gas prices lower this winter
Wednesday, January 2nd 2002, 12:00 am
By: News On 6
TULSA, Okla. (AP) _ Natural gas prices are expected to be much lower this winter compared to last year because suppliers have stored more gas than consumers will need, industry officials said.
``The next nine months of pricing are going to be much lower,'' said V. Alan Ratliff, president of Woodbine Natural Gas Marketing in Tulsa. ``I wouldn't be a bit surprised to see gas prices go below $2 between now and Oct. 1.''
The amount of gas stored in this country Dec. 21 totaled 2.98 trillion cubic feet _ 54 percent above last year and the highest level ever recorded by the American Gas Association at that time of year.
Mild weather in November and December reduced demand, leaving plenty of gas for the rest of winter.
By April, there should be about 1 trillion cubic feet of gas left in storage, Ratliff said.
The price of western Oklahoma natural gas closed Monday at $2.60, down from $10.20 a year earlier when supplies were short and demand was high.
Oklahoma Natural Gas Co. customers are paying $5.36 per thousand cubic feet (mcf) of gas, more than twice the market price.
The price ONG charges customers is higher because ONG bought 40 percent of this winter's gas supply in the summer, when gas prices were higher, said ONG spokesman Don Sherry. Prices for those supplies averaged $4.38 per mcf, about 70 percent above current market prices.
ONG acquired 40 percent of its winter gas supply last summer after it was strongly criticized by state regulators for not purchasing any of last winter's supply during summer months. Customers would have saved millions of dollars in heating costs last winter had ONG acquired winter supplies in the summer, regulators said.
The cost of gas for ONG customers now is 32 percent lower than this time last year.
Natural gas futures plunged 74 percent in 2001 as a slowing economy and mild weather led to a 4.4 percent drop in U.S. demand, according to the U.S. Department of Energy. The nation's gas production surged 2.6 percent after prices quadrupled in 2000.
As a result, gas utilities and other suppliers were able to stow away gas in underground reservoirs at a record pace in 2001.
ONG is the state's largest gas utility, serving 800,000 Oklahoma customers.