Price volatility may force new measures on US gas processors

Spiking US natural gas prices in late 2000 and early 2001 surprised many gas processors; most had not hedged the cost side of their profit margins.Those margins through 2001 hovered at or below breakeven levels for 9 of 12 months because natural gas prices declined relatively slowly on fears of another price spike during the 2001-02 winter heating season. At the same time, the US economic recession and persistent weakness in ethylene feedstock demand pushed crude oil and NGL prices steadily lower after mid-year.This article presents an evaluation of trends in natural gas and crude oil pricing and pricing volatility and the implications for gas processing profitability. This article also e...

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