Natural gas prices well below five-year average

Natural gas prices have fallen sharply in recent weeks with potential implications both for home heating and for natural gas-fired generation, according to The Associated Press. 

Early on Thursday, January 12, natural gas futures had fallen as low as $2.69 per 1,000 cubic feet, down 3.1 percent from opening prices and 13 percent from the week before. That price represents a 13.4 percent decline over the same period the year before and a 17 percent drop from the five-year average. 

Natural gas production has risen dramatically in recent years as more companies direct their efforts to previously unrecoverable shale and other deposits. In addition, the U.S. has seen an unseasonably warm winter. With roughly half of the nation using natural gas for heating, this has resulted in substantially lower demand. 

The U.S. Energy Information Administration notes that more than one-fifth of the nation also relies upon natural gas plants and the drop could lead to lower electricity rates in those areas. However, The Associated Press reports that the country did see a decline in gas supplies last week after seeing a substantial surge, and some companies have explored the possibility of natural gas exports. 

More detailed information on natural gas prices is available at PennEnergy's Research area.

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