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Natural gas spot prices for March down 21 percent Drop follows 34 percent decline for February contracts; average March spot price still 97 percent above spot price for March 2000 Petroleum News Alaska
Average monthly spot prices for natural gas in March contracts fell 21 percent nationwide, as concern over possible winter supply shortfalls eased, according to data released by Platts, the energy market information division of The McGraw-Hill Companies.
The decline comes on top of a 34 percent drop last month for February contracts. Still, the $4.95 per million Btu average monthly spot price for supply areas nationwide in March 2001 was 97 percent above the March 2000 average of $2.51.
Prices nearly doubled 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 high-cost New York and New Jersey markets for March dropped about 30 percent, to $5.63 per MMBtu from $8.02 in February. But this month’s average is still about 85 percent higher than the March 2000 average of $3.05 per MMBtu.
In Southern California, where demand for gas from the troubled electric generation sector has kept spot prices strong, the average monthly spot price for March rose slightly to $12.53 per MMBtu from $12.51 in February. Spot prices there are 384 percent higher than in March 2000 when the average was $2.59.
On a national basis, the average monthly spot price for supply areas dropped about 21 percent this month, to $4.95 per MMBtu from $6.23 in February.
“Although spot prices have dropped significantly from this winter’s unprecedented heights, they still are nearly double year-ago levels,” said Kelley Doolan, natural gas market specialist for Platts and chief editor of Inside FERC’s Gas Market Report. “This is due largely to the market’s uncertainty about whether there will be enough new gas produced over the next year to satisfy demand from all the gas-fired electric plants scheduled to come on stream during the period. If we have a particularly hot summer, competition between gas utilities purchasing for storage, and electric utilities purchasing to generate power for air-conditioning loads could become fierce and cause gas prices to remain high or even move higher.”
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