US natural gas futures prices continued to escalate Tuesday in the face of an unusually cold winter that has drained gas storage 23% below the mid-December average level for the last 5 years.
With cold weather continuing throughout key market areas in the Midwest and Eastern US, some pessimists now speculate that the US may exhaust its total gas storage by the end of winter.
That could produce even greater price spikes. Gas placed in storage through the summer months provides about 20% of total gas supplies that are consumed each winter and as much as half the gas burned on peak heating days in those key markets.
The January contract for natural gas climbed another 22.6� to $9.805/Mcf on the New York Mercantile Exchange.
Although gas prices will drop in the spring, some analysts predict they will likely average above $5/Mcf in 2001.
Most new electric power plants are designed to be gas fired, increasing demand for that fuel year-round. As a result, winter storage supplies cannot be replenished as quickly each summer as in the past.
Meanwhile, the February contract for benchmark US light, sweet crudes also rose 46� to $26.64/bbl on the NYMEX, while the March contract moved up 26� to $26.05/bbl.
Heating oil for January delivery jumped 5.7� to 93.5�/gal, while unleaded gasoline for the same month gained 1.95� to 76.04/gal.
The International Petroleum Exchange in London was closed Tuesday for the holiday.